Delaying Social Security Payments: A Bootstrap

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.