NBER Finds 90% of Workers Gain by Delaying Social Security, Avoiding $182,370 Loss
Updated
Updated · FinanceBuzz · Jun 3
NBER Finds 90% of Workers Gain by Delaying Social Security, Avoiding $182,370 Loss
2 articles · Updated · FinanceBuzz · Jun 3
Summary
More than 90% of Americans ages 45 to 62 would be financially better off waiting until 70 to claim Social Security, with the typical early filer giving up about $182,370 in lifetime discretionary spending, an NBER working paper found.
The study modeled taxes, Medicare premiums and other benefit interactions, and still found delaying raises lifetime spending by 10.4% on average; a quarter of households gain more than 17%, and 10% gain over 26%.
Lower-income workers benefit most: the poorest fifth saw a median 15.9% spending increase because Social Security replaces a larger share of their income.
The gap is driven by benefit rules: checks rise 8% for each year claiming is delayed past full retirement age up to 70, while claiming at 62 permanently cuts payments. A $2,000 age-67 benefit falls to about $1,400 at 62 or rises to roughly $2,480 at 70.
The paper says waiting is most attractive for healthier workers with other income or savings and for couples seeking larger survivor benefits, while poor health, physically demanding jobs or immediate cash needs can still make early claiming the better choice.