Working Paper: NBER ID: w22942
Authors: Raimond Maurer; Olivia S. Mitchell
Abstract: We have designed and fielded an experimental module in the 2014 HRS which seeks to measure older persons’ willingness to voluntarily defer claiming of Social Security benefits. In addition, we evaluate the stated willingness of older individuals to work longer, depending on the Social Security incentives offered to delay claiming their benefits. Our project extends previous work by analyzing the results from our HRS module and comparing findings from other data sources which included very much smaller samples of older persons. We show that half of the respondents would delay claiming if no work requirement were in place under the status quo, and only slightly fewer, 46%, with a work requirement. We also asked respondents how large a lump sum they would need with or without a work requirement. In the former case, the average amount needed to induce delayed claiming was about $60,400, while when part-time work was required, the average was $66,700. This implies a low utility value of leisure foregone of only $6,300, or under 20% of average household income.
Keywords: Social Security; Retirement; Willingness to Delay; Lump Sum; Experimental Module
JEL Codes: D03; D91; G11; H55
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Lump sum payments (J33) | Willingness to delay claiming Social Security benefits (J26) |
| Actuarially fair lump sum of $60,000 (J17) | Willingness to delay claiming Social Security benefits (J26) |
| Average lump sum needed to incentivize delay (D15) | Willingness to delay claiming Social Security benefits (J26) |
| Willingness to delay claiming Social Security benefits (J26) | Policy influence (D78) |