NEWS

Research Study by Economics Professors cited in the New York Times

May, 2007

A recent research study by professors Hugo Benitez-Silva, Debra S. Dwyer, and Warren C. Sanderson was cited in the Business Day section of the New York Times of Saturday May 12, in an article in page C1 and C6, about retirement and Social Security benefits. The research piece which is also co-authored with Frank Heiland at Florida State University, received funding from the Michigan Retirement Research Center, and can be downloaded, in its most recent form, by clicking in the following link [download in pdf]

As cited in the NYT, one of the main insights of the study is that fear among older Americans that Social Security benefits might not be there in the future, drives a majority of the retirees to claim benefits as soon as they are available. The authors' work also shows that the scheduled increases in the Normal Retirement Age seem to be correctly considered by individuals as mere benefit cuts, and are not strongly influencing their claiming behavior, which has changed little in the last years.

Finally, the study shows how important is for Americans to understand the details about how work and earnings after claiming benefits affect their Social Security current and future benefits. The key being that benefits lost to the Earnings Test are not really lost but returned to the individual in the form of higher benefits after reaching the Normal Retirement Age.