A recent study reveals four reasons why people start taking Social Security retirement benefits early, passing up the higher monthly benefits they could receive by waiting:
- Fear of loss. People who have a stronger aversion to financial loss also tended to say they would claim earlier. To them, the researchers said, a delay in receiving their benefit checks “looks like a potential loss.”
- Life expectancy. It’s intuitive that an individual who doesn’t expect to live as long might want to start his benefits as soon as possible, and that’s what the analysis concluded. The researchers found that 10 years added to one’s life expectancy will delay a Social Security filing by six months.
- Fairness. The individuals surveyed were asked whether they agreed with several statements about Social Security, such as “I feel that I have earned these retirement benefits.” The more strongly an individual agreed with such statements, the more likely they were to say they would file for their benefits early.
- Patience. This finding was self-explanatory: the more impatient an individual, the more likely he is to claim early.