A New Idea for Solving Social Security’s Money Troubles
Wharton professor Olivia S. Mitchell has put forth a novel way to help solve the Social Security deficit. In “Will They Take the Money and Work? An Empirical Analysis of People’s Willingness to Delay Claiming Social Security Benefits for a Lump Sum,” Mitchell and her colleagues argue that lump-sum payouts serve as an incentive to put off collecting Social Security. Her research explored whether more Americans would delay claiming if they could get their increased Social Security benefit at a later age in the form of a lump sum, instead of a higher benefit for life. The study found that many people would voluntarily claim later, and work longer, if they could get lump sums, plus benefits of this amount. Interestingly, those who would delay were the same people who intended to quit working earliest under current rules.
Mitchell’s results suggest early retirees are not all forced to retire, but instead could, with the right incentives, remain in the labor force longer.
Source/more: Philadelphia Inquirer
David Wingate is an elder law attorney at the Elder Law Office of David Wingate, LLC. The elder law office services clients with powers of attorneys, living wills, Wills, Trusts, Medicaid and asset protection. The Elder Law office has locations in Frederick and Montgomery Counties, Maryland.