When’s The Best Time To Claim Social Security?

A new Cornell University study analyzes the effects of personal preference when determining when to begin drawing from Social Security as well as the interventions aimed at helping people make reasoned decisions when claiming.

Among the key findings: Considering regret or needs of one’s ‘future self’ is important, but societal norms regarding retirement are not.

“Everyone feels like their own working career is unique, their own family situation is unique, and their own life expectations are unique,” said Cornell SC Johnson College of Business Professor Suzanne Shu who helped lead the research. “And so, it might not be helpful to hear what other people are doing. There are so many variables that are really individual here, so talking about social norms doesn’t work here.”

For this work, the research team—which included researchers from the University of California, Los Angeles’ Anderson School of Management, as well as Bocconi University in Milan, Italy—conducted an experiment with more than 3,500 people between the ages of 40 and 61 (63% female), broken into 14 groups, including one control.

The 13 experiment groups fell into five broad classes of interventions:

• framing payment information (breaking down amounts based on claiming age);
• normative messages (what is considered “normal” behavior);
• consideration of future selves (anticipating the effects of a decision);
• information-based interventions (contextual information about their needs in retirement); and
• self-reflection interventions (including considering the downside risk of “living too long”).

Overall, the researchers found that claiming intentions are relatively difficult to influence, but several interventions seem to have more sway than others. Payment framing – pointing out the gains that could be had by waiting – were influential, as were consideration of future regret, concerns about life expectancy, and fact-based reasons why one might want to delay claiming the benefit.

“We were doing it almost as a horse race,” Shu said, “saying, ‘OK, here’s a bunch of different ideas of what might work, let’s put them all side by side and see which ones actually move the needle the most.’”

So, when’s the best time to claim Social Security? The researchers’ main takeaways do not offer a definitive answer to the question of when it’s best to start drawing the benefit. That will always be a personal decision; there is no right and wrong.