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Future Beneficiary Expectations of the Returns to Delayed Social Security Benefit Claiming and Choice Behavior

Author

Listed:
  • Jeff Dominitz

    (RAND)

  • Angela Hung

    (RAND)

  • Arthur vanSoest

    (Tilburg University and RAND)

Abstract

We report on our preliminary findings from an innovative module of survey questions in the RAND American Life Panel designed to measure willingness to delay take-up of Social Security benefits. Among respondents who expect to stop working full time prior to turning age 62, over 60 percent report that they expect to start claiming Social Security benefits after they turn 63--that is, they expect to delay claiming. In contrast, among those who expect to stop full-time work sometime from age 62 to age 70, only about onequarter expect to delay claiming beyond the retirement age. Another main finding arises from reported probabilities of delayed claiming in hypothetical choice scenarios. These probabilities tend to be quite high relative to previous findings on delayed claiming outcomes. This result is particularly striking for those who are presented with information about the so-called "break-even age" for delayed claiming rather than information about the total amount of benefits that must be foregone during the one year delay.

Suggested Citation

  • Jeff Dominitz & Angela Hung & Arthur vanSoest, 2007. "Future Beneficiary Expectations of the Returns to Delayed Social Security Benefit Claiming and Choice Behavior," Working Papers wp164, University of Michigan, Michigan Retirement Research Center.
    • Handle: RePEc:mrr:papers:wp164
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    File URL: http://mrdrc.isr.umich.edu/publications/Papers/pdf/wp164.pdf
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    References listed on IDEAS

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    1. James E. Duggan & Christopher J. Soares, 2002. "Actuarial Nonequivalence in Early and Delayed Social Security Benefit Claims," Public Finance Review, , vol. 30(3), pages 188-207, May.
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    Cited by:

    1. Jeffrey B. Liebman & Erzo F. P. Luttmer, 2015. "Would People Behave Differently If They Better Understood Social Security? Evidence from a Field Experiment," American Economic Journal: Economic Policy, American Economic Association, vol. 7(1), pages 275-299, February.
    2. Margaret J. Lay, 2019. "Pension Contributions, Pension Awareness, And Changing Personal Finances," Contemporary Economic Policy, Western Economic Association International, vol. 37(4), pages 673-693, October.
    3. Niels Vermeer, 2016. "Age Anchors and the Expected Retirement Age: An Experimental Study," De Economist, Springer, vol. 164(3), pages 255-279, September.
    4. Jeffrey B. Liebman & Erzo F. P. Luttmer, 2012. "The Perception of Social Security Incentives for Labor Supply and Retirement: The Median Voter Knows More Than You'd Think," Tax Policy and the Economy, University of Chicago Press, vol. 26(1), pages 1-42.

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