Framing Effects and Expected Social Security Claiming Behavior

Eligible participants in the U.S. Social Security system may claim benefits anytime from age 62-70, with benefit levels actuarially adjusted based on the claiming age. This paper shows that individual intentions with regard to Social Security claiming ages are sensitive to how the early versus late claiming decision is framed. Using an experimental design, the authors find that the use of a "break-even analysis" has the very strong effect of encouraging individuals to claim early. They also show that individuals are more likely to report they will delay claiming when later claiming is framed as a gain, and when the information provides an anchoring point at older, rather than younger, ages. Moreover, females, individuals with credit card debt, and workers with lower expected benefits are more strongly influenced by framing. They conclude that some individuals may not make fully rational optimizing choices when it comes to choosing a claiming date.