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Do Social Security Statements Affect Knowledge and Behavior?

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  • Giovanni Mastrobuoni

Abstract

Deciding when to retire and claim Social Security benefits is one of the most important financial decisions that workers face. Therefore, ensuring that they have easy access to clear and timely information about their benefit options is a key goal for policymakers. In 1995, the Social Security Administration introduced the “Statement,” a record of past earnings and a summary of estimated benefits at selected claiming ages that is designed to help workers plan for retirement. The Statement is now mailed annually to all workers age 25 and over. While the Statement has the potential to be a very valuable tool, little research has been done on its impact. A Gallup survey revealed that individuals who had received a Statement had a significant increase in their understanding of basic Social Security features. The most recent U.S. Government Accountability Office report on the Statement found that 66 percent of workers remember receiving a Statement and 90 percent of these workers say that they remember the amount of estimated Social Security benefits. These findings suggest that the Statement might improve knowledge, but provide no information about whether it changes behavior. Both topics are the subject of this brief. This brief is organized as follows. The first section explains the data and methodology used in the analysis. The second and third sections present the findings on how the Statement impacts knowledge and behavior, respectively. The final section concludes that the Statement does increase knowledge for individuals who were not inclined to seek the information on their own, but the Statement does not appear to change behavior.

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File URL: http://crr.bc.edu/briefs/do-social-security-statements-affect-knowledge-and-behavior/
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Bibliographic Info

Paper provided by Center for Retirement Research in its series Issues in Brief with number ib2011-6.

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Length: 6 pages
Date of creation: Apr 2011
Date of revision: Apr 2011
Handle: RePEc:crr:issbrf:ib2011-6

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