The Effects of Subjective Survival on Retirements and Social Security Claiming

According to the life-cycle model, mortality risk will influence both retirement and the desire to annuitize wealth. The authors estimate the effect of subjective survival probabilities on retirement and on the claiming of Social Security benefits because delayed claiming is equivalent to the purchase of additional Social Security annuities. The authors find that those with very low subjective probabilities of survival retire earlier and claim earlier than those with higher subjective probabilities, but the effects are not large. The great majority of workers claim as soon as they are eligible.