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Delaying Social Security Payments: A Bootstrap

Journal Title
Financial Services Review
Keywords
Social Security
 Delayed Benefits
 Asset Allocation
 Bootstrap
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Term and Year
Publication Date
2006-10-01
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Publication Volume
15
Publication Issue
3
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Brockport Business-Economics Faculty Publications
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bus_facpub/15/fulltext (1).pdf
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http://hdl.handle.net/20.500.12648/2082
Abstract
This paper reconciles previous research outcomes and explains why prior studies offer conflicting recommendations regarding the decision to delay Social Security payments. Using a bootstrap, this paper determines the age at which a retiree is better off deferring Social Security payments when rates of return are not constant. The expected rate of return affects the breakeven age and the rate of return is a function of asset allocation. When life expectancy and realistic investment returns are incorporated into the analysis, there are few circumstances that warrant postponing Social Security payments for early retirees.
Citation
Spitzer, J. J. (2006). Delaying Social Security payments: a bootstrap. Financial Services Review , 15 (3), 233-245
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© 2006 Academy of Financial Services. All rights reserved.
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