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WILL THEY TAKE THE MONEY AND WORK? PEOPLE'S WILLINGNESS TO DELAY CLAIMING SOCIAL SECURITY BENEFITS FOR a LUMP SUM

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  • Raimond Maurer
  • Olivia S. Mitchell
  • Ralph Rogalla
  • Tatjana Schimetschek

Abstract

This article investigates whether exchanging Social Security delayed retirement credits, currently paid as increases in lifelong benefits, for a lump sum would induce later claiming and additional work. We show that people would voluntarily claim about 6 months later if the lump sum were paid for claiming after the early retirement age, and about 8 months later if the lump sum were paid only for those claiming after their full retirement age. Overall, people will work one‐third to one‐half of the additional months. Those who would currently claim at the youngest ages are most responsive to the lump sum offer.

Suggested Citation

  • Raimond Maurer & Olivia S. Mitchell & Ralph Rogalla & Tatjana Schimetschek, 2018. "WILL THEY TAKE THE MONEY AND WORK? PEOPLE'S WILLINGNESS TO DELAY CLAIMING SOCIAL SECURITY BENEFITS FOR a LUMP SUM," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 85(4), pages 877-909, December.
    • Handle: RePEc:bla:jrinsu:v:85:y:2018:i:4:p:877-909
    DOI: 10.1111/jori.12173
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    Cited by:

    1. Jeffrey R. Brown & Arie Kapteyn & Erzo F. P. Luttmer & Olivia S. Mitchell & Anya Samek, 2021. "Behavioral Impediments to Valuing Annuities: Complexity and Choice Bracketing," The Review of Economics and Statistics, MIT Press, vol. 103(3), pages 533-546, July.
    2. Raimond Maurer & Olivia S. Mitchell & Ralph Rogalla & Tatjana Schimetschek, 2021. "Optimal social security claiming behavior under lump sum incentives: Theory and evidence," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 88(1), pages 5-27, March.
    3. Gorry, Devon & Lee, Kyung Min & Slavov, Sita Nataraj, 2023. "Does the actuarial adjustment for pension delay affect retirement and claiming decisions?," Journal of Pension Economics and Finance, Cambridge University Press, vol. 22(4), pages 590-603, October.
    4. Franca Glenzer & Pierre-Carl Michaud & Stefan Staubli, 2023. "Frames, Incentives, and Education: Effectiveness of Interventions to Delay Public Pension Claiming," CIRANO Working Papers 2023s-05, CIRANO.
    5. Jason S. Scott & John B. Shoven & Sita N. Slavov & John G. Watson, 2020. "Can Low Retirement Savings Be Rationalized?," NBER Working Papers 26784, National Bureau of Economic Research, Inc.

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