The Financial Feasibility of Delaying Social Security: Evidence from Administrative Tax Data / Gopi Shah Goda, Shanthi Ramnath, John B. Shoven, Sita Nataraj Slavov.

Format:

Book

Author/Creator:

Goda, Gopi Shah.

Contributor:

National Bureau of Economic Research.

Ramnath, Shanthi.

Shoven, John B.

Slavov, Sita Nataraj.

Series:

Working Paper Series (National Bureau of Economic Research) no. w21544.

NBER working paper series no. w21544

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Financial Feasibility of Delaying Social Security

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2015.

Summary:

Despite the large and growing returns to deferring Social Security benefits, most individuals claim Social Security before the full retirement age, currently age 66. In this paper, we use a panel of administrative tax data on likely primary earners to explore some potential hypotheses of why individuals fail to delay claiming Social Security, including liquidity constraints and private information regarding one's expected future lifetime. We find that approximately 31-34% of beneficiaries who claim prior to the full retirement age have assets in Individual Retirement Accounts (IRAs) that would fund at least 2 additional years of Social Security benefits, and 24-26% could fund at least 4 years of Social Security deferral with IRA assets alone. Our analysis suggests that these percentages would be considerably higher if other assets were taken into account. We find evidence that those who claim prior to the full retirement age have higher subjective and actual mortality rates than those who claim later, suggesting that private information about expected future lifetimes may influence claiming behavior.

Notes:

Print version record

September 2015.