Ms. Smith is a Senior Economist in the Social Security Administration’s Office of Retirement Policy, where her research interests focus on the intersection of Social Security and financial education. One of her current research projects focuses on the impact of the Social Security Statement on retirement-benefit-claiming age. She has also worked with staff at the U.S. Department of Labor to develop a Retirement Toolkit that provides a timeline for making decisions about receiving pensions, Social Security, and Medicare along with references to additional information.
Prior to joining the Social Security Administration, she worked for the Board of Governors of the Federal Reserve System. Before that, she established and directed the Financial Education Project at the Organisation for Economic Cooperation and Development in Paris, France. Under her supervision, the Project produced the first major international study of financial education programs. She has also worked as a Senior Economist at the U.S. Government Accountability Office in Washington, DC, where she was responsible for leading projects on Social Security and pension issues. Ms Smith has taught economics at Old Dominion University in Norfolk, Virginia, and worked as a research associate at Mathematica Policy Research and as a junior economist at the Council of Economic Advisers. She received her Ph.D. from the University of Michigan.
Barbara A. Smith, Social Security Administration, and Kenneth A. Couch, University of Connecticut
Policymakers are increasingly concerned about the retirement security of American workers. Social Security retirement benefits represent an important component of retirement income for most workers. The decision as to when to claim these benefits is one of the most serious financial decisions that individuals will make. Articles in both the popular press and the research literature discuss how delayed claiming can contribute to retirement security. We look at how the retirement benefit claiming decision is affected by the information provided in the Social Security Statement, which the Social Security Administration (SSA) has been mailing to American workers since 1995.
Our previous work showed that receipt of the Statement led to sizeable increases in knowledge about Social Security Administration programs and benefits. We continue this research making use of the Continuous Work History Sample (CWHS) to analyze the impact of Statement receipt on claiming of Social Security retirement benefits and individual labor force participation. We estimate models that contrast those who would have received a Statement with those who would not have making use of the implementation schedule for the mailings. We also examine the effect of controlling for the increase in full retirement age (FRA) that occurred for individuals turning 62 in 2000 through 2004. This allows us to contrast impacts of the mailing with other changes in retirement policy and separate their effects empirically.
We find that receipt of the Statement resulted in statistically significant decreases in benefit claiming at earlier ages and corresponding increases in claiming at later ages. Even after controlling for the impacts of the FRA, we find that receipt of the Statement had a significant effect on claiming behavior. These patterns are stronger among sub-groups who received a greater number of Statement mailings from SSA and those that have more attachment to the labor market. Receipt of the Statement also resulted in significant increases in labor force participation at all ages from 62 through 70. Our results, although preliminary, suggest that the provision of information might be an effective tool for policymakers interested in encouraging retirement security by having workers delay claiming Social Security benefits and work longer.