The psychology of Social Security claiming

By Jeffrey Steele

For Five Cent Nickel

Published: Wednesday, Oct. 16 2013 2:35 p.m. MDT

After probing the deep recesses of the study participants’ noggins, the profs also asked at what age participants would claim Social Security payments. It was then a simple matter of identifying what psychological traits were — and here’s that word again — linked with those who planned to file at the earliest ages.

Here’s what was discovered:

Life expectancy

Many people justify early Social Security claiming by arguing they likely won’t live long. The study confirmed this tendency, finding those who figured they’d cash in their chips early also cashed in on benefits early. But even expectations of longer lives skewed toward earlier claiming. For every 10 additional years folks thought they would live, Social Security filings were delayed by only six months.

Fear of loss

The respondents with the greatest fear of financial loss generally planned to claim their Social Security checks earlier. The irony is that studies have shown that people tend to live longer than they think they will, and that Social Security plays a larger and larger role in funding their lives the longer folks live. By locking in lower payments late in life, they’re trading fear of loss for assurance of loss.

The system’s fairness

The professors asked respondents how strongly they agreed with statements such as “I feel I’ve earned these retirement benefits.” The stronger the agreement, the earlier participants planned to seize their checks.


Patient study participants were more likely to report planning to take benefits later, while those with the least patience planned to line their pockets sooner.

Conclusion There you have it. Despite all the evidence they will benefit by waiting to turn on the Social Security payment stream, people still let their psychological and emotional leanings outweigh their analytical selves.

In short, you can show people the math, but all too many retort: “Show me the money.”

Jeffrey Steele is an independent writer in Chicago who has written over 2,000 articles appearing in publications such as Barron's, Boston Globe, Chicago Sun-Times, LA Times, and more.

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