Managing the Risk of Life
This study analyzes the role of individual’s and spouse’s survival expectations and knowledge about Social Security rules on the expected Social Security claiming age, taking into account the various incentives single and married individuals face. There is substantial heterogeneity in the level of knowledge about SS rules according to demographic characteristics. We find that single men and women who expect to be long-lived plan on delaying Social Security claiming. When we allow for differential effects of survival on knowledge about Social Security rules, subjective survivals matter only for single women who are knowledgeable. For single men, knowledge is not so important in their decisions. The claiming decision of married individuals is more complicated, because they are entitled to spouse’s and survivor’s benefits. Consistent with the incentives provided by Social Security rules, we find that married men base their expected claiming age on their spouse’s survival expectations but not on their own survival. For married women, both own and spouse’s subjective survivals positively influence the timing of claiming. Knowledge about Social Security rules affects the expected claiming age of both married men and women.
|Date of creation:||Oct 2007|
|Date of revision:|
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- Sewin Chan & Ann Huff Stevens, 2003.
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NBER Working Papers
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- Michael Hurd & James P. Smith & Julie M. Zissimopoulos, 2003.
"The Effects of Subjective Survival on Retirements and Social Security Claiming,"
03-11, RAND Corporation.
- Michael D. Hurd & James P. Smith & Julie M. Zissimopoulos, 2004. "The effects of subjective survival on retirement and Social Security claiming," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 19(6), pages 761-775.
- Michael D. Hurd & James P. Smith & Julie M. Zissimopoulos, 2002. "The Effects of Subjective Survival on Retirement and Social Security Claiming," Working Papers wp021, University of Michigan, Michigan Retirement Research Center.
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- Alan L. Gustman & Thomas L. Steinmeier, 2001.
"Imperfect Knowledge, Retirement and Saving,"
wp012, University of Michigan, Michigan Retirement Research Center.
- COILE, Courtney & DIAMOND, Peter & GRUBER, Jonathan & JOUSTEN, Alain, 2000.
"Delays in claiming social security benefits,"
CORE Discussion Papers
2000029, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Michael D. Hurd & Kathleen McGarry, 1997.
"The Predictive Validity of Subjective Probabilities of Survival,"
NBER Working Papers
6193, National Bureau of Economic Research, Inc.
- Michael D. Hurd & Kathleen McGarry, 2002. "The Predictive Validity of Subjective Probabilities of Survival," Economic Journal, Royal Economic Society, vol. 112(482), pages 966-985, October.
- Adeline Delavande & Michael Perry & Robert Willis, 2006. "Probabilistic Thinking and Early Social Security Claiming," Working Papers wp129, University of Michigan, Michigan Retirement Research Center.
- Li Gan & Michael Hurd & Daniel McFadden, 2003.
"Individual Subjective Survival Curves,"
NBER Working Papers
9480, National Bureau of Economic Research, Inc.
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