Do Older Adults Accurately Forecast Their Social Security Benefits?

Grant Seiter and Sita Slavov

No 31023, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: How accurate are older people’s expectations about their future Social Security benefits? Using panel data from the Health and Retirement Study, we compare respondents’ observed Social Security claiming ages and benefits with subjective expectations provided during their 50s and early 60s. We find that, while older adults generally have accurate expectations about their claiming age, they underestimate their annual Social Security income by approximately $1,896 (11.5 percent) on average. However, both accuracy and precision increase with age, and the forecast error for people in their early 60s is not statistically different from zero. Exploiting plausibly exogenous variation in the mailing of Social Security statements, which contain personalized information about future benefits, we show that information provision reduces the forecast error in annual income by $344 (2.1 percent of the average benefit).

JEL-codes: E21 H55 J14 J26 (search for similar items in EconPapers)
Date: 2023-03
New Economics Papers: this item is included in nep-age, nep-dem, nep-hea and nep-pbe
Note: AG
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Journal Article: Do older adults accurately forecast their social security benefits? (2025)
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