Framing is a widespread intervention in the “choice architecture” literature, which seeks to uncover how the design of a decision environment influences choice. Yet, in this case, the intervention had no detectable impact. Even when individuals saw a graph showing how earlier claiming resulted in losing money relative to what they could receive, many still preferred to claim early.
The second intervention varied the order of prompts asking people to consider the benefits of claiming early and the benefits of claiming late. Although it shouldn’t logically make a difference which option people consider first, previous research on query theory suggests that thinking about one option in a choice set actually makes it harder to think about alternatives; the order in which you think about options matters.
According to the theory, when people think about early claiming first, the benefits of doing so—perhaps the relief of leaving an unpleasant job or using the extra income for long overdue house repairs—are vivid in their minds. Subsequent thoughts of delayed claiming—such as having more money during years when medical expenses might be highest—are simply harder to access when the benefits of early claiming are already top of mind. However, when the order of these considerations is reversed, thoughtful consideration of delayed claiming has a fighting chance.
The authors found that people who first considered the reasons for delayed claiming reported that they preferred to claim an average of 9.4 months later than those who first considered the reasons for early claiming, which would typically lead to a $660 increase in benefits per year. While seemingly modest, every $1,000 increase in annual Social Security benefits leads to a 2 to 3 percentage point reduction in poverty rates among senior households. With almost 3 million US citizens turning 65 every year, if the authors’ low-touch, essentially costless intervention actually led to a 9.4-month average delay in claiming, it could potentially help thousands of seniors every year stave off poverty.
Future research can explore if individuals follow up on their stated preferences to delay claiming. As the literature on present bias demonstrates, stating a preference to make a prudent choice does not mean that people actually make that choice when it is time to act. However, the query theory-based intervention is a low-cost way of nudging individuals approaching retirement to plan a little more wisely for their future.