Two Decades of Social Security Claiming

Sita Slavov

No 30843, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Twenty years ago, the adjustment to monthly Social Security benefits for early or delayed claiming was, on average, roughly actuarially fair, although some subsets of individuals could gain from delay. Since then, delaying claiming has become much more attractive thanks to three factors: a more generous delayed retirement credit, improvements in mortality, and historically low real interest rates. In this article, I examine how these three factors influence optimal claiming behavior. I also discuss empirical patterns of claiming across individuals and over time, as well as explanations for these patterns. I argue that although many people appear to claim suboptimally early, this behavior may be changing as information spreads about the importance of the claiming decision. Finally, I discuss policy towards claiming and the impact that an increase in strategic claiming could have on Social Security’s finances.

JEL-codes: G59 H55 J26 (search for similar items in EconPapers)
Date: 2023-01
New Economics Papers: this item is included in nep-age, nep-lma and nep-pbe
Note: AG
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