Time to retire: Why Americans claim benefits early & how to encourage delay

Abstract

Because they are retiring earlier, living longer, and not saving enough for retirement, many Americans would benefit financially if they delayed claiming Social Security retirement benefits. However, almost half of Americans claim benefits as soon as possible. Responding to the Simpson– Bowles Commission's 2010 recommendation that behavioral economics approaches be used to encourage delayed claiming, we analyzed this decision using query theory, which describes how the order in which people consider their options influences their choices. After confirming that people consider early claiming before and more often than they consider later claiming, we designed interventions intended to encourage later claiming. Changing how information was presented did not produce significant shifts, but asking people to focus on the future first significantly delayed preferred claiming ages. Policymakers can apply these insights.