Delays in claiming social security benefits

This paper focuses on Social Security benefit claiming behavior, a take-up decision that
has been ignored in the previous literature. Using financial calculations and simulations
based on an expected utility maximization model, we show that delaying benefit claim for a
period of time after retirement is optimal in a wide variety of cases and that gains from
delay may be significant.We find that approximately 10% of men retiring before their 62nd
birthday delay claiming for at least 1 year after eligibility. We estimate hazard and probit
models using data from the New Beneficiary Data System to test four cross-sectional
predictions. While the data suggest that too few men delay, we find that the pattern of
delays by early retirees is generally consistent with the hypotheses generated by our
theoretical model.