High demand for paper by Raimond Maurer
The paper "Optimal Social Security Claiming Behavior Under Lump Sum Incentives: Theory and Evidence" by Raimond Maurer was among the top 10 most downloaded articles in the prestigious Journal of Risk and Insurance in 2021.
Many U.S. citizens apply for Social Security benefits early, despite the resulting lower monthly payments after retirement. In a paper published in the Journal of Risk and Insurance, Raimond Maurer, Olivia S. Mitchell (The Wharton School, University of Pennsylvania), Ralph Rogalla (St. John’s University, New York), and Tatjana Schimetschek address the question of whether the timing of applying for Social Security retirement benefits is later when one-time payments (lump sum incentives) are expected, instead of higher monthly payments. For this purpose, the authors conduct an empirical study using the American Life Panel. They explain the results theoretically by using a structural life-cycle model. The authors conclude that, in the case of actuarially fairly calculated one-time payments instead of an increase in the monthly pension payment, the individuals concerned would postpone retirement by one year. A corresponding reform could thus create attractive incentives to extend working lives.
The link to the Open Access publication can be found here