Personality, longevity insurance, and the timing of Social Security claiming

Abstract

Delaying a Social Security claim buys a larger inflation‐indexed annuity, a form of longevity insurance. Because claiming‐age adjustments are uniform within birth cohorts, delay is worth more to those likely to live longer, so traits that predict longer lives should predict later claiming. In the Health and Retirement Study, we relate Big Five traits measured before receipt to the age at first reported Social Security income of any type between 62 and 70. Converting each trait's mortality difference into the claiming age maximizing expected present value gives a benchmark for observed timing. Timing moves toward the benchmark for traits predicting shorter lives, by less than mortality implies, with openness the exception. Conscientiousness, the strongest longevity predictor, implies about 6 months of later claiming per standard deviation, yet we detect no later receipt. Personality makes observable a mortality difference that claiming models treat as latent.