Social Security Decisions: Should Recipients Opt for Early Payments?
Two Excel-based templates are developed to help determine when it is optimal for starting to receive monthly social security benefits. The decision information accounts for uncertain life expectancy by implementing a rate of return that should be set, at a minimum, to the individual’s expected return on investments or based on a metric provided in the article that considers potential life expectancy.
Excel templates allow for a comparison of receiving lower monthly social security benefits at an earlier age versus waiting for higher monthly benefits at a later age.
A “reserve rule of 72” metric allows for adjustments on comparing the different social security payment structures based on life expectancy.
Other adjustments for comparing the different social security structures can made for those who work while receiving benefits.
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Arnold, Tom, John H. Earl, Jr., Terry D. Nixon. "Social Security Decisions: Should Recipients Opt for Early Payments?," University of Richmond Robins School of Business, (2022): 1-15.
Click below to download supplemental content.SOCIAL-SECURITY-DECISIONS-PAPER.xlsx (17 kB)