Delaying claiming past the early eligibility age of 62 has taken on increased importance. Individuals turning 62 with no job and limited income may be able to use temporary assistance programs such as Unemployment Insurance (UI), Medicaid, and the Supplemental Nutrition Assistance Program (SNAP) as sources of support prior to collecting Social Security benefits. To what extent do these programs allow recipients to delay Social Security claiming? The challenge in answering this question stems from the fact that program users’ dire economic straits may make them more likely to claim benefits from both Social Security and these programs, generating a misleading correlation between Social Security claiming and temporary assistance benefits. This paper constructs instruments for program generosity that vary with an individual’s state of residence but should not reflect the characteristics or circumstances of the individual.
This paper found that:
- UI does not have a statistically significant relationship with claiming.
- The availability of Medicaid is associated with earlier claiming, at least in part because states require Medicaid-eligible applicants to also claim Social Security as part of an effort to capture every potential source of income.
- SNAP does not have a significant effect on claiming, perhaps because of the program’s generally low take-up.
The policy implications of this paper are:
- Reductions or expansions of UI or SNAP would be unlikely to delay the timing of Social Security claiming.
- An expansion of Medicaid may cause some individuals to claim earlier than they would have, although more research is needed to determine whether this is due to Medicaid itself or state policies that require individuals to avail themselves of potential income.