The potential effect of offering lump sums as retirement payments

  • The paper discusses an additional reform proposal for enhancing Social Security solvency which reframes the existing debate in a different light. In our research, we focus on incentives to prolong working years and to delay benefits claiming as a way of sustaining Social Security. Specifically, we analyze how the offer of a budget-neutral, actuarially fair lump sum payment - instead of the current delayed retirement credit – would encourage people to delay claiming their OASI benefits and work longer. The results of our research will be useful for policymakers, namely in (1) measuring who would delay claiming benefits if offered a lump sum instead of higher annuity payments, (2) examining how long they would wait, and (3) how much longer, if at all, they would continue working in the interim.

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Author:Raimond MaurerORCiDGND, Olivia S. MitchellORCiDGND, Ralph RogallaGND, Tatjana Schimetschek
Parent Title (English):SAFE policy letter series ; 50
Series (Serial Number):SAFE policy letter (50)
Place of publication:Frankfurt am Main
Document Type:Working Paper
Date of Publication (online):2015/11/27
Date of first Publication:2015/11/27
Publishing Institution:Universitätsbibliothek Johann Christian Senckenberg
Release Date:2016/01/12
Tag:Pension system; Social Security solvency
Issue:November 2015
Page Number:9
Institutes:Wirtschaftswissenschaften / Wirtschaftswissenschaften
Wissenschaftliche Zentren und koordinierte Programme / House of Finance (HoF)
Wissenschaftliche Zentren und koordinierte Programme / Center for Financial Studies (CFS)
Wissenschaftliche Zentren und koordinierte Programme / Sustainable Architecture for Finance in Europe (SAFE)
Dewey Decimal Classification:3 Sozialwissenschaften / 33 Wirtschaft / 330 Wirtschaft
Licence (German):License LogoDeutsches Urheberrecht