Scary Headlines Drive People to Claim Social Security Earlier – and That Has Real Consequences

DOGE’s attack on Social Security has put the agency’s operations at risk, compromised the security of personal data, and created widespread anxiety about the reliability of the program.  At the same time claims are surging.  Although the agency suggests other reasons for the surge, I am convinced – based, in part, on a survey of participants’ reactions to scary newspaper headlines by my colleagues Laura Quinby and Gal Wettstein – that fear of losing benefits is playing a major role. 

DOGE has launched a four-pronged attack on Social Security:

• Launching false claims of massive fraud, by alleging that people’s payroll tax contributions were going to dead people.    
• Characterizing the program as a “Ponzi scheme,” which suggests that it is not financially sound. 
• Making deep cuts to frontline staff and SSA field offices, and initially ending phone service before revisiting and eventually abandoning the idea.
• Jeopardizing benefit delivery by pushing sudden procedural changes at the same time that the agency has lost significant technical expertise. 

These attacks have received widespread media attention, and stories abound about people unable to reach a Social Security representative or get an appointment at a field office.  

At the same time, Social Security has been swamped by an unprecedented number of claims for retirement benefits.  The Urban Institute reports that 276,000 more retired workers claimed benefits so far this fiscal year, which puts the agency on track for a 15-percent increase in FY 2025 – five times the average increase over the past 12 years.  

Social Security officials offer several reasons for the surge in applications: more Baby Boomers turning 65; recent legislation that increased benefits for state/local workers; and improved agency communication with spouses of beneficiaries who may be eligible for higher benefits from their own work records.  But anxiety about being able to access benefits and the future of the program certainly also play an important role.

My colleagues documented the effect of fear on claiming in an on-line experiment that looked at participants’ responses to scary descriptions of Social Security finances.  The “Control” group saw a headline similar to the summary document for the 2020 Trustees Report: “Social Security Faces a Long-Term Financing Shortfall.”  The “Treatment” groups saw three different versions of headlines emphasizing trust fund depletion (see Table 1).

The hypothesis was that, relative to the headline shown to the control group, the three headlines emphasizing the trust fund depletion would make respondents think that a policy change is imminent.  Indeed, the results showed that all of the headlines referencing the trust fund led to earlier claiming than the headline used for the control group, who had a planned mean claiming age of 66.

Respondents who saw the first headline (“reserves depleted in 2034”) expected to claim half a year earlier, while those who saw the second headline (“trust fund headed toward insolvency in 2034”) expected to claim a full year earlier, and respondents who saw the third headline (“revenues cover 75 percent of benefits”) planned to claim 0.7 years earlier.

Claiming earlier means that participants often stop working sooner than planned, stop saving in their 401(k) plan, and lock themselves into actuarially reduced monthly benefits.  That is, claiming earlier has real costs.  

In short, DOGE is not only damaging the Social Security Administration as an entity but harming the financial security of older workers by scaring them into claiming early.