Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/205233 
Year of Publication: 
2019
Series/Report no.: 
CFS Working Paper Series No. 629
Publisher: 
Goethe University Frankfurt, Center for Financial Studies (CFS), Frankfurt a. M.
Abstract: 
Many Americans claim Social Security benefits early, though this leaves them with lower benefits throughout retirement. We build a lifecycle model that closely tracks claiming patterns under current rules, and we use it to predict claiming delays if, by delaying benefits, people received a lump sum instead of an annuity. We predict that current early claimers would defer claiming by a year given actuarially fair lump sums, and the predictions conform with respondents' answers to a strategic survey about the lump sum. In other words, such a reform could provide an avenue for encouraging delayed retirement without benefit cuts or tax increases. Moreover, many people would still defer claiming even for smaller lump sums.
Subjects: 
retirement
annuity
delayed claiming
pension
early retirement
Social Security
JEL: 
G11
G22
H55
J26
J32
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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