Older peoples' willingness to delay social security claiming

  • We have designed and implemented an experimental module in the 2014 Health and Retirement Study to measure older persons' willingness to defer claiming of Social Security benefits. Under the current system’ status quo where delaying claiming boosts eventual benefits, we show that 46% of the respondents would delay claiming and work longer. If respondents were instead offered an actuarially fair lump sum payment instead of higher lifelong benefits, about 56% indicate they would delay claiming. Without a work requirement, the average amount needed to induce delayed claiming is only $60,400, while when part-time work is stipulated, the amount is slightly higher, $66,700. This small difference implies a low utility value of leisure foregone, of under 20% of average household income.
Author:Raimond MaurerORCiDGND, Olivia S. MitchellORCiDGND
Parent Title (English):Journal of pension economics and finance
Publisher:Cambridge Univ. Press
Place of publication:Cambridge
Document Type:Article
Date of Publication (online):2020/01/14
Date of first Publication:2020/01/14
Publishing Institution:Universitätsbibliothek Johann Christian Senckenberg
Release Date:2023/01/20
Tag:Annuity; labor supply; lump sum; retirement age; social security
Page Number:16
First Page:410
Last Page:425
The research reported herein was performed pursuant to a grant from the US Social Security Administration (SSA) funded as part of the Michigan Retirement Research Center. Additional research support was provided by the Deutsche Forschungsgemeinschaft (DFG), the German Investment and Asset Management Association (BVI), the Pension Research Council/Boettner Center at The Wharton School of the University of Pennsylvania, and the Metzler Exchange Professor program. We also acknowledge support from the Research Center SAFE, funded by the State of Hessen initiative for research excellence, LOEWE.
Institutes:Wirtschaftswissenschaften / Wirtschaftswissenschaften
Dewey Decimal Classification:3 Sozialwissenschaften / 33 Wirtschaft / 330 Wirtschaft
JEL-Classification:D Microeconomics / D0 General / D03 Behavioral Economics; Underlying Principles (Updated!)
D Microeconomics / D9 Intertemporal Choice and Growth / D91 Intertemporal Consumer Choice; Life Cycle Models and Saving
G Financial Economics / G1 General Financial Markets / G11 Portfolio Choice; Investment Decisions
H Public Economics / H5 National Government Expenditures and Related Policies / H55 Social Security and Public Pensions
Licence (German):License LogoCreative Commons - Namensnennung 4.0