Older peoples' willingness to delay social security claiming

TitleOlder peoples' willingness to delay social security claiming
Publication TypeJournal Article
Year of Publication2020
AuthorsMaurer, R, Mitchell, OS
JournalJournal of Pension Economics and Finance
Pagination1–16
Type of ArticleJournal
KeywordsAnnuity, Labor Supply, lump sum, Retirement Age, Social Security
Abstract

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.

DOI10.1017/S1474747219000404
Citation Keymaurer_mitchell_2020