The financial feasibility of delaying Social Security: evidence from administrative tax data

TitleThe financial feasibility of delaying Social Security: evidence from administrative tax data
Publication TypeJournal Article
Year of Publication2018
AuthorsGoda, GShah, Ramnath, S, Shoven, J, Slavov, S
JournalJournal of Pension Economics and Finance
Volume17
Issue4
Pagination419-436
Date PublishedJul-04-2018
ISSN Number1474-7472
KeywordsRetirement Planning and Satisfaction, Social Security, Social Security linkage
Abstract

Despite the large and growing returns to deferring Social Security benefits, most individuals claim Social Security before the full retirement age. In this paper, we use a panel of administrative tax data on individuals likely to financially benefit from delaying Social Security claiming to explore the relationship between Social Security claiming and distributions from tax-advantaged retirement savings accounts. We find that the majority of our sample claim Social Security prior to taking distributions from Individual Retirement Accounts (IRAs). We also find that a third of our sample have IRA balances equivalent to at least two additional years of Social Security benefits, and a quarter have IRA balances equivalent to at least 4 years of Social Security benefits. We complement our analysis with data from the Health and Retirement Study and find that these percentages are considerably higher when other financial assets are taken into account. Copyright © Cambridge University Press 2017 This is a work of the U.S. Government and is not subject to copyright protection in the United States.

URLhttps://www.cambridge.org/core/product/identifier/S147474721700004X/type/journal_articlehttps://www.cambridge.org/core/services/aop-cambridge-core/content/view/S147474721700004X
DOI10.1017/S147474721700004X
Short TitleJournal of Pension Economics and Finance
Citation Key9070