(UM12-06) - Expectations about Social Security and Retirement Planning: The Role of Uncertainty and the Impact of Economic Shocks
Adeline Delavande and Susann Rohwedder
Forming realistic expectations about future Social Security benefits is critical to successful retirement planning. We propose to use new panel data on Social Security expectations to (i) assess the degree of individuals’ uncertainty about their future Social Security benefits and claiming age, and how it varies by characteristics; (ii) document changes over time in the levels and distributions of individuals’ subjective expectations about the amount and timing of their future Social Security benefits; (iii) identify factors relevant to the formation of these expectations by relating their changes over time to changes in other covariates (e.g., risk of unemployment, asset position); and, (iv) investigate how the level and uncertainty of future benefits influences behavior related to retirement planning. The main data come from the 2007 and 2011 waves of the HRS Internet Survey, which span the onset of the current financial crisis.