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Older Peoples' Willingness to Delay Social Security Claiming

Raimond Maurer, Olivia S. Mitchell


This chapter is a preliminary draft unless otherwise noted. It may not have been subjected to the formal review process of the NBER. This page will be updated as the chapter is revised.

Chapter in forthcoming NBER book Incentives and Limitations of Employment Policies on Retirement Transitions: Comparisons of Public and Private Sectors, Robert L. Clark and Joseph P. Newhouse, organizers
Conference held August 9-10, 2019
Forthcoming from Journal of Pension Economics and Finance (Cambridge University Press)

We have designed and implemented an experimental module in the 2014 Health and Retirement Study to measure older persons' willingness to defer claiming of Social Security benefits. Under the current system’ status quo where delaying claiming boosts eventual benefits, we show that 46% of the respondents would delay claiming and work longer. If respondents were instead offered an actuarially fair lump sum payment instead of higher lifelong benefits, about 56% indicate they would delay claiming. Without a work requirement, the average amount needed to induce delayed claiming is only $60,400, while when part-time work is stipulated, the amount is slightly higher, $66,700. This small difference implies a low utility value of leisure foregone, of under 20% of average household income.

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Document Object Identifier (DOI): https://doi.org/10.1017/S1474747219000404

This chapter first appeared as NBER working paper w22942, Older Peoples’ Willingness to Delay Social Security Claiming, Raimond Maurer, Olivia S. Mitchell
 
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