An experimental analysis of modifications to the survivor benefit information within the Social Security statement

Abstract

The Social Security Statement is the primary resource most workers prefer to use to learn about their Social Security benefits. The Social Security Administration periodically mails this and supporting documents to all workers to help them make informed decisions about when to start receiving their benefits. Understandably, the Statement provides detailed information about the worker's retirement benefit. However, these documents contain remarkably little information about the survivor benefit despite the financial importance of this particular auxiliary benefit to the widows of deceased workers in widowhood. We analyze the effect of modifications to the survivor benefit information in the Statement on benefit knowledge and expected claiming behavior of married men using an experimental survey of workers. The results provide evidence that the augmentation of this information can temporarily improve benefit knowledge and influence expected claim ages.

Would Greater Awareness of Social Security Survivor Benefits Affect Claiming Decisions?

“…The Social Security Statement is a natural outlet for communications about benefit design because past studies have shown that it succeeds at improving knowledge, although it seems to have little effect on actual behavior (Biggs 2010;Mastrobuoni 2011;Smith and Couch 2014). Consistent with these earlier studies, Diebold and Camilleri (2018) find that information about benefit design increases planned claiming ages by about one year, but that the effect disappears in a follow-up survey three months later. The treatment effect could dissipate because respondents -married men ages 30 to 61 -are too far away from retirement to seriously contemplate widowhood.…”

“…A lack of knowledge about survivor benefits could contribute to the decision to claim early. A number of surveys report high rates of ignorance about key features of Social Security survivor benefits, including the fact that a husband's actuarial penalty for claiming early carries over to his widow's survivor benefit (Brown and Perron 2011;Greenwald et al 2010;Liebman and Luttmer 2012;and Diebold and Camilleri 2018). Similarly, Sass et al (2007) cautiously interpret the positive relationship between educational attainment and claiming age as evidence that husbands with higher financial literacy improve the well-being of their widows.…”

“…Similarly, Sass et al (2007) cautiously interpret the positive relationship between educational attainment and claiming age as evidence that husbands with higher financial literacy improve the well-being of their widows. 2 In response to these calls for financial education, Diebold and Camilleri (2018) use an online experiment to test whether information about survivor benefits increases the anticipated claiming ages of husbands ages 30-61. This experiment provides the treated husbands with extensive explanations about how delayed claiming affects individual, spousal, and survivor benefits within the framework of the Social Security Statement, an informational packet that the SSA mails to workers not yet receiving benefits.…”

“…Unlike Diebold and Camilleri (2018), the information treatments delivered in this experiment do not cause husbands to increase their intended claiming ages. Instead, participants seem to respond to the framing of the mySocialSecurity homepage, which presents the viewer's FRA as the default claiming age and could be viewed as a recommendation on the part of the SSA.…”

“…The second phase of the analysis uses an online experiment to determine whether raising a husband's awareness that delayed claiming could improve his wife's well-being as a widow affects his stated claiming intentions. The experiment builds on recent work by Diebold and Camilleri (2018) who modified an online version of the Social Security Statement to teach husbands ages 30-61 how their widow's survivor benefit would rise if they delayed claiming.…”