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The Optimal Time to File for Social Security Benefits

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  • Thad W. Mirer

    (State University of New York at Albany)

Abstract

Under current Social Security rules, a newly retired worker can affect the age structure of benefits that he or she will receive by choosing when to file for a claim for benefits: the longer the claim is deferred, the greater the monthly benefit will be. This article examines the alternatives available to individuals and presents a life cycle model of retirement planning that determines the optimal time to file for benefits. The model is applied with the Social Security rules for 1998 and with an idealized system in which all adjustments to benefits are actuarially fair. It is shown that in many cases individuals will choose to file for benefits several years after retirement instead of immediately. The gain achieved by doing this can be substantial.

Suggested Citation

  • Thad W. Mirer, 1998. "The Optimal Time to File for Social Security Benefits," Public Finance Review, , vol. 26(6), pages 611-636, November.
  • Handle: RePEc:sae:pubfin:v:26:y:1998:i:6:p:611-636
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    File URL: http://pfr.sagepub.com/content/26/6/611.abstract
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    Cited by:

    1. Coile, Courtney & Diamond, Peter & Gruber, Jonathan & Jousten, Alain, 2002. "Delays in claiming social security benefits," Journal of Public Economics, Elsevier, vol. 84(3), pages 357-385, June.
    2. Frank W. Heiland & Na Yin, 2014. "Have We Finally Achieved Actuarial Fairness of Social Security Retirement Benefits and Will It Last?," Working Papers wp307, University of Michigan, Michigan Retirement Research Center.

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