Optimal Social Security Claiming Behavior under Lump Sum Incentives: Theory and Evidence

Raimond Maurer, Olivia Mitchell, Ralph Rogalla and Tatjana Schimetschek

No 23073, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: People who delay claiming Social Security receive higher lifelong benefits upon retirement. We survey individuals on their willingness to delay claiming later, if they could receive a lump sum in lieu of a higher annuity payment. Using a moment-matching approach, we calibrate a lifecycle model tracking observed claiming patterns under current rules and predict optimal claiming outcomes under the lump sum approach. Our model correctly predicts that early claimers under current rules would delay claiming most when offered actuarially fair lump sums, and for lump sums worth 87% as much, claiming ages would still be higher than at present.

JEL-codes: G11 G22 H55 J26 J32 (search for similar items in EconPapers)
Date: 2017-01
New Economics Papers: this item is included in nep-age, nep-pbe and nep-pub
Note: AG LS
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Citations: View citations in EconPapers (3)

Published as 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 and Insurance, vol 88(1), pages 5-27.

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Related works:
Journal Article: Optimal social security claiming behavior under lump sum incentives: Theory and evidence (2021)
Working Paper: Optimal social security claiming behavior under lump sum incentives: Theory and evidence (2019)
Working Paper: Optimal social security claiming behavior under lump sum incentives: Theory and evidence (2017)
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