Title
Risk, standard deviation, and expected value: when should an individual start social security?
Document Type
Article
Article Version
Post-print
Publication Date
12-26-2018
Abstract
In choosing when to start collecting Social Security, the differences in expected net present values (NPVs) are small—but the corresponding standard deviations are not. Starting earlier is less risky. The case analyzed is single individuals in the U.S. system, but the methodology can be applied to couples and to the systems of other nations. Considering risk and return together places Social Security in the same risk/return framework as other capital investments. Behavioral, situational, and qualitative factors that often dominate decisions on when to start are linked with quantitative approaches to longevity risk and mortality risk.
Publication Title
The Engineering Economist
Repository Citation
Eschenbach, T. G. and Lewis, Neal, "Risk, standard deviation, and expected value: when should an individual start social security?" (2018). Business Faculty Publications. 229.
https://digitalcommons.fairfield.edu/business-facultypubs/229
Published Citation
Eschenbach, Ted G., and Neal A. Lewis. "Risk, standard deviation, and expected value: when should an individual start social security?." The Engineering Economist (2018): 1-16. https://doi.org/10.1080/0013791X.2018.1532543.
DOI
10.1080/0013791X.2018.1532543
Peer Reviewed
Comments
Copyright 2018 Taylor & Francis
The author post-print has been archived here with permission from the copyright holder.