Older People's Willingness to Delay Social Security Claiming

28 Pages Posted: 8 Dec 2016 Last revised: 25 Feb 2020

See all articles by Raimond Maurer

Raimond Maurer

Goethe University Frankfurt

Olivia S. Mitchell

University of Pennsylvania - The Wharton School; University of Pennsylvania - The Wharton School, Pension Research Council; National Bureau of Economic Research (NBER)

Date Written: September 1, 2016

Abstract

We designed and fielded an experimental module in the 2014 HRS which seeks to measure older persons’ willingness to voluntarily defer claiming of Social Security benefits. In addition we evaluate the stated willingness of older individuals to work longer, depending on the Social Security incentives offered to delay claiming their benefits. Our project extends previous work by analyzing the results from our HRS module and comparing findings from other data sources, which included very much smaller samples of older persons. We show that half of the respondents would delay claiming if no work requirement were in place under the status quo, and only slightly fewer, 46 percent, with a work requirement. We also asked respondents how large a lump sum they would need with or without a work requirement. In the former case, the average amount needed to induce delayed claiming was about $60,400, while when part-time work was required, the average was $66,700. This implies a low utility value of leisure foregone of only $6,300, or about 10 percent of older households’ income.

Keywords: Social Security, Benefit Delay, Lump Sum, HRS

Suggested Citation

Maurer, Raimond and Mitchell, Olivia S., Older People's Willingness to Delay Social Security Claiming (September 1, 2016). Michigan Retirement Research Center Research Paper No. 2016-346, Wharton Pension Research Council Working Paper No. 2016-10, Available at SSRN: https://ssrn.com/abstract=2881523 or http://dx.doi.org/10.2139/ssrn.2881523

Raimond Maurer (Contact Author)

Goethe University Frankfurt ( email )

Grüneburgplatz 1
Frankfurt am Main, 60323
Germany

Olivia S. Mitchell

University of Pennsylvania - The Wharton School ( email )

Philadelphia, PA 19104-6365
United States

University of Pennsylvania - The Wharton School, Pension Research Council ( email )

3302 Steinberg Hall-Dietrich Hall
3620 Locust Walk
Philadelphia, PA 19104-6302
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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