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The Psychology Behind Starting Social Security at 62

January 25, 2024

Social Security supplies a substantial share, and often the majority, of a retiree’s income. For these older workers delaying signing up for their benefits is often a smart strategy.

For every year they wait, the delay will increase the size of their monthly checks by 7 percent or more.

But, as researchers Suzanne Shu and John Payne point out in a newly published study, that is not what many people do. They explored the reasons so many sign up soon after they turn 62 and become eligible. They also may have found a way to present information about benefits that helps workers make the smarter choice.

People may be starting their benefits early for sound financial reasons. In a Great Recession survival strategy, for example, laid-off baby boomers were claiming their benefits early. But there are also psychological reasons for prematurely starting Social Security even when it doesn’t make financial sense. That’s what this study investigates.

One reason is that workers, after years of payroll taxes being deducted from their paychecks, feel a sense of ownership about their future benefits – and they are eager to claim what is theirs. The individuals in this study who said in an online survey that they intend to start Social Security on the earlier side expressed a strong feeling of ownership, agreeing with the statement they had “earned these retirement benefits.”

Another important reason people sign up sooner is the natural human aversion to losing, which this survey gauged by asking the participants to choose what type of gamble they would be willing to take. They were considered to be more loss averse if they chose a gamble that would have a high probability of either a $400 gain or a $400 loss over the riskier gamble in which they could either win $800 or risk a larger $600 loss. 

One group with the opposite tendency – a willingness to delay benefits – was people who predicted they would live longer. In this case, the reasoning might be that, given the low balances in workers’ 401(k) accounts, they may be concerned about running through that source of income quickly in retirement. Lacking adequate savings to get through old age, the larger check that comes with delaying Social Security will help.

Delaying as long as possible is probably the right strategy for workers who haven’t saved enough on their own. But how to convince them? To try to influence the decision, the researchers tested a couple of ways of presenting their future benefit information to the workers in their study.

One group saw a chart that listed how much a hypothetical worker could expect in his monthly Social Security check, ranging from $1,339 at age 62 to $2,395 at 70.

A second group’s chart totalled up the lifetime benefits. The retiree who signed up for the $1,339 check at 62 would accumulate a total of $353,500 in benefits if he lived to 85. But if he waited until 70, the $2,395 benefits paid every month would add up to $402,360.

The people who saw the larger lifetime totals said they would claim their benefits much earlier.

The reason they were put off by the larger amount may come back to the psychological phenomenon of loss aversion. Seeing that larger dollar figure apparently heightened their fear of loss.

Perhaps seeing the totals made them “more impatient for receiving it,” the researchers said.


To read this study by Suzanne Shu and John Payne, see “Social Security Claiming Intentions: Psychological Ownership, Loss Aversion, and Information Displays.”

The research reported herein was derived in whole or in part from research activities performed pursuant to a grant from the U.S. Social Security Administration (SSA) funded as part of the Retirement and Disability Research Consortium.  The opinions and conclusions expressed are solely those of the authors and do not represent the opinions or policy of SSA, any agency of the federal government, or Boston College.  Neither the United States Government nor any agency thereof, nor any of their employees, make any warranty, express or implied, or assumes any legal liability or responsibility for the accuracy, completeness, or usefulness of the contents of this report.  Reference herein to any specific commercial product, process or service by trade name, trademark, manufacturer, or otherwise does not necessarily constitute or imply endorsement, recommendation or favoring by the United States Government or any agency thereof.

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