The financial feasibility of delaying Social Security: evidence from administrative tax data

Abstract

Despite the large and growing returns to deferring Social Security benefits, most individuals claim Social Security before the full retirement age. In this paper, we use a panel of administrative tax data on individuals likely to financially benefit from delaying Social Security claiming to explore the relationship between Social Security claiming and distributions from tax-advantaged retirement savings accounts. We find that the majority of our sample claim Social Security prior to taking distributions from Individual Retirement Accounts (IRAs). We also find that a third of our sample have IRA balances equivalent to at least two additional years of Social Security benefits, and a quarter have IRA balances equivalent to at least 4 years of Social Security benefits. We complement our analysis with data from the Health and Retirement Study and find that these percentages are considerably higher when other financial assets are taken into account.JEL CODES: H55, J26, J32, D14, D31

Drawing Down Retirement Wealth: Interactions between Social Security Wealth and Private Retirement Savings

“…Mastrobuoni (2009) focused on the gradual increase of the FRA to examine how this change in benefit generosity impacted the age at retirement, finding that that mean retirement age increased by approximately one-half of the increase in the full retirement age. Using the HRS, Gustman and Steinmeier (2009) also arrive at similar conclusions: the increase in the FRA, increase in the delayed retirement credit and the removal of the earnings test in 2000 served to increase labor force participation for those between the ages of 65 and 67.…”

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Optimal Social Security Claiming Behavior under Lump Sum Incentives: Theory and Evidence

“…We note, however, thatGoda, Shoven, Ramnath, and Slavov (2015) found that one-third of Social Security early retirees had financial assets in their Individual Retirement Accounts sufficient to finance at least two additional years of deferral, and about one-quarter could self-finance at least four years of deferral. Other assets were not included in that calculation, so that the likely impact of liquidity constraints is probably far lower.10 As noted above, the survey module is detailed inMaurer, Mitchell, Rogalla, and Schimetschek (2016a).…”

Critical contraints for disable entrepreneurs: fiscal and economic-organizative factors

“…Also, the tax regulation on entrepreneurship, and the particularities for people with disabilities (Goda, ramnath, shoven & slavov, 2018;spreat, 2017), together with the organizational aspects become an element that can directly affect the success or failure of the entrepreneur.…”