Practical Applications of Minimizing the Risk of Opportunity Loss in the Social Security Claiming Decision

Abstract

With Americans retiring earlier and living longer, the decision about when to start claiming Social Security benefits is more urgent than ever before. Researchers disagree about the optimal claimingage—some say earlier, others say later.

Brian Alleva, a Research Analyst at the Office of Retirement Policy of the Social Security Administration , offers a new approach to the decision. You can get more out of your Social Security asset by positioning it where it fits best in the whole retirement income plan, rather than just optimizing the claiming decision in isolation, Alleva says. He suggests optimizing over a target period, a well-chosen segment within the full retirement horizon, to minimize the risk of not maximizing lifetime benefits when Social Security would matter most to you.