ISR|SRC|Michigan Retirement Research Center|UofM
Mailing List | News | Contact Us
Follow onTwitter
Main photo Promoting research on retirement and Social Security policy

Key Findings Details

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 H. Maurer, Olivia S. Mitchell, Ralph Rogalla and Tatjana Schimetschek
WP 2014-308

  • Our research asks whether replacing Social Security’s annuitized delayed retirement credit with a lump sum payment would potentially induce people to claim benefits later and work longer.
  • Using an experimental module in the American Life Panel, we show that:
    • people would voluntarily work longer if they were offered an actuarially fair lump sum instead of the delayed retirement credit under the current system, and
    • people would voluntarily work between one-quarter and half of the additional time until claiming.

  • The claiming delay would average half a year if the lump sum were paid for claiming later than age 62, and about two-thirds of a year if the lump sum were paid only for claiming after the Full Retirement Age.
  • Individuals who respond most to the lump sum incentives are those who would have claimed earliest, under the current rules.