There is no conflict of interest.
Highlights
- The study’s objective was to examine the impact of the delayed retirement credit (DRC) increases on public benefits receipt.
- The study used a difference-in-differences model with data from the Social Security Administration to assess whether Social Security claimants were more likely to delay claiming their benefits after DRC increases.
- This study did not find a significant effect of the DRC increases on Social Security benefits claims.
- This study receives a moderate evidence rating. This means we are somewhat confident that any estimated effects would be attributable to delayed retirement credit increases, but other factors might also have contributed. However, the study did not find statistically significant effects.
Features of the Intervention
The delayed retirement credit (DRC) enhances Social Security benefits for individuals who wait until they reach full retirement age to claim. Introduced in 1983, the credit increased incrementally from 3% for those born before 1925 to 8% for those born in 1943 and later. The Social Security Administration has modified the credit by 0.5 percentage points every two years, leading to different credits based on birth years. For example, people born in 1925 and 1926 received a 3.5% credit, while those born in 1927 and 1928 got a 4% credit. The maximum credit of 8% is available to anyone who delays claiming benefits until age 70. This policy affects all individuals born after 1924 who choose to claim Social Security benefits after age 62.
Features of the Study
The study used a difference-in-differences approach to examine the impact of increases in DRC on Social Security claimants' decisions to postpone claiming benefits until reaching full retirement age. It used data from the Social Security Administration to form treatment and comparison groups, with the treatment group experiencing a half-percentage point increase in delayed retirement credits, while the comparison group did not. The sample consisted of 10 percent of records from the Master Beneficiary Record, focusing on male primary beneficiaries born between 1923 and 1933 who were eligible for Social Security and alive at age 62. Further restrictions were applied to include only those who claimed benefits between ages 62 and 70, with complete race data, specifically those born from October to March. Individuals born in the six months surrounding a credit increase were classified into the treatment group, while those born outside this period were placed in the comparison group. The average birth year of participants was 1928, with a demographic breakdown showing 7.6% Black, 2.5% neither Black nor White, and 4.3% claiming benefits at age 66 or later. The average benefit claimed was $486.48. The authors used statistical models to determine if claimants were more inclined to delay benefits if born during the specified period of the DRC increase.
Findings
Public Benefits Receipt
- The study did not find any significant effect of increases in the DRC on whether men delayed claiming benefits until after they reached full retirement age.
Considerations for Interpreting the Findings
Findings from this study are only applicable to men. As the authors explain, many external circumstances could have influenced women’s work experiences for this age group, so it would be extremely challenging to claim that any results represented only the impact of the increase in the delayed retirement credit.
Causal Evidence Rating
Research Guidelines
Review Protocol: Living Systematic Annual Search and Review Protocol
Review Guidelines: Causal Evidence Guidelines