What tempts us to start Social Security too early?

Mitch Strohm

Too many of us are starting Social Security too soon.

At least that's what lots of experts think when they see two out of every five seniors — 38% of men and 43% of women who turned 62 in 2012 — filing for retirement benefits during their first year of eligibility.

Only about 3% of seniors put off getting their checks until they reach the maximum age of 70.

That's a concern because the longer you wait to begin your benefits, the more money you get.

If, for example, you had a recent average annual income of $55,000 and took benefits at age 62, you'd receive around $1,094 per month. Waiting until age 66 would pull in $1,454 per month and delaying until age 70 would get you $1,907 per month.

Filing at age 70 instead of 62 brings in almost an extra $10,000 per year. (Check out our 6-step guide: When to start collecting Social Security.)

So why are people taking this benefit so early?

Researchers at the business schools of Duke University and the University of California at Los Angeles recently took a look at the psychology of Social Security claiming decisions.

The study, which surveyed Americans ages 35 to 65, examined attitudes about risk, values and how people make judgments.

It found that claiming decisions are often tied to false presumptions about life expectancy and misunderstandings about the Social Security system in general.

Suzanne Shu

Suzanne Shu

In psychology terms, it's a combination of what is called loss aversion and perceived ownership, says Suzanne Shu, co-author of the study and assistant professor at UCLA's Anderson School of Management.

In other words, many of us see Social Security as something that already belongs to us, and the longer we have to wait for it, the more it feels like a loss.

What we need to remember is that Social Security isn't a personal account; it's a promise of a benefit, an insurance against old age.

But general impatience certainly plays a part in early claiming as well. The study found that those who are considered patient are more willing to wait to claim Social Security until after age 65. That's not too surprising.

Of course, not everyone can afford to be patient. Some individuals have to claim early.

If you're unemployed and out of savings, or if you're only working part time and finding it impossible to make ends meet, then your immediate need takes priority.

Getting less per month is better than waiting and sinking into debt or financial ruin.

So there has to be a large number of people claiming early who don't have any other choice, right?

"That's definitely a big factor," Shu says, but the study didn't take that into account. Her research team was looking strictly at the psychology of the decision-making process.

She notes that the number of people claiming early went up when the economy was in turmoil and unemployment was higher.

Studies have also shown that people who are in more physical jobs also seem to claim Social Security early, Shu notes.

"There are lots of reasons why people do claim it at age 62," she says. "But the numbers of people claiming at age 62 are still even too large to be entirely driven by that, which is why we wanted to try to look at what some of the other factors might be."

It's proving difficult to persuade people who don't need to take the benefit to wait.

Shu says that's part of what the research is aiming for: What kind of advice can we come up with that will convince Americans to wait to claim Social Security?

Pushing individuals to think more about regret might be one option — how will I feel in 10 years having claimed early? The anticipation of that regret might be enough to make people think twice about claiming at age 62, says Shu.

Another route is getting individuals to precommit to claiming later, sort of like how some retirement programs allow you to precommit to saving more each year.

There's no real answer yet.

"We're just playing with ideas at this point," Shu says.