Will they take the money and work? An empirical analysis of people's willingness to delay claiming social security benefits for a lump sum

Raimond Maurer, Olivia Mitchell, Ralph Rogalla and Tatjana Schimetschek

No 84, SAFE Working Paper Series from Leibniz Institute for Financial Research SAFE

Abstract: This paper investigates whether exchanging the Social Security delayed retirement credit, currently paid as an increase in lifetime annuity benefits, for a lump sum would induce later claiming and additional work. We show that people would voluntarily claim about half a year later if the lump sum were paid for claiming any time after the Early Retirement Age, and about two-thirds of a year later if the lump sum were paid only for those claiming after their Full Retirement Age. Overall, people will work one-third to one-half of the additional months, compared to the status quo. Those who would currently claim at the youngest ages are likely to be most responsive to the offer of a lump sum benefit.

Keywords: annuity; lump sum; social security; delayed retirement; lifetime income; pension (search for similar items in EconPapers)
JEL-codes: D01 D04 D12 D14 G22 H55 (search for similar items in EconPapers)
Date: 2015
New Economics Papers: this item is included in nep-age, nep-lab and nep-mfd
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https://www.econstor.eu/bitstream/10419/107412/1/818760877.pdf (application/pdf)

Related works:
Working Paper: Will They Take the Money and Work? An Empirical Analysis of People’s Willingness to Delay Claiming Social Security Benefits for a Lump Sum (2014)
Working Paper: Will They Take the Money and Work? An Empirical Analysis of People's Willingness to Delay Claiming Social Security Benefits for a Lump Sum (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:safewp:84

DOI: 10.2139/ssrn.2567341

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