The Gratification Game

Have You Ever Been Mallow?

In the world of Psychology, there is an often-cited study that was conducted at Stanford University called the Marshmallow Experiment. This was research targeting the study of delayed gratification. The research consisted of multiple test variations, but the process across the board was similar. The test subjects, children, were offered the option of one marshmallow now or two marshmallows later, if they were willing to wait. Again, the study was intended to measure the children’s self-control. The researchers would then follow up a decade or so later to see if the test subject’s ability to delay gratification resulted in a measurable difference in SAT scores, etc. Would the child who was willing to delay gratification be predestined to more success based on their ability to resist eating that first marshmallow?

These researchers came to their own conclusions on this relationship between one’s marshmallow decision and how that relates to one’s future successes in life. And like most research, this study has also received its fair share of criticism too. Here’s my question, could one opt for eating the first marshmallow now for reasons unrelated to self-control or patience? What if I wasn’t interested in two marshmallows, and eating one now was more appealing for me personally. Could this decision be deeper than just a binary conclusion separating participants into categories of patient and impatient?

This seems silly to dialogue about when we are talking marshmallows, but there are many examples in life where we are offered incentives to delay engagement. For these 6-year-old test subjects, it was about marshmallows, but for 62-year-olds, this decision is about claiming social security.

I’d Gladly Pay You Tuesday for a Hamburger Today

Here’s how social security works, based on your birth year, you are assigned an age that is deemed “full retirement age.” You have to claim to 100% of your social security income at this age, which is calculated based on your personal earnings record. If you were born 1960 or later, your full retirement age is 67. Now, here’s the social security “marshmallow” offer, if your full retirement age is 67 and you opt to receive benefits at 62, you will only have a claim to 70% of your benefit amount. If you delay claiming until 70, you will receive 124% of your defined benefit amount. So, again we are presented with these incentives for deferring, yet there is more riding on this decision than just another mallow (as Ham from Sandlot would call it).

Much like the Marshmallow Experiment’s conclusions, countless financial planners have written articles criticizing investors that opt to claim early. These articles use language like “you are leaving money on the table” and call into question the investor’s ability to be patient. These presentations focus on simple arithmetic around how one could extract the most dollars from the social security department over a lifetime. This oversimplification falls short.

When you should claim social security is a planning decision, which means it’s a personal decision. A decision that should be crafted to meet someone’s personal financial plan needs. For some plans, claiming at 62 will create ideal timing, allowing for earlier retirement and lowering their portfolio’s withdrawal rates. For others, maybe claiming at 62 absolutely doesn’t make sense, as they plan to work longer, and based on social security benefit rules, these earnings may be deducted from their benefits.

Suspecting and Knowing are not the Same  – Rick Riordan

This article can’t guide you to what the ideal claiming strategy is for your situation; that’s a conversation to be had with your financial planner. What I can tell you, though, is that this decision doesn’t have to be a reflection on your patience or your ability to delay gratification. Do you want to know what the most popular age is for claiming social security benefits? Age 62. Over half of social security recipients claim before full retirement age. I’m sure some of these decisions are related to our weakness as human beings to delay gratification. Still, I also don’t think it’s right to make blanket statements and conclusions around this either. Too much financial planning literature regarding social security focuses on shaming investors to claim as late as possible.

A great place to start these claiming strategy discussions is to look at the breakeven points for claiming at different ages. You can start to see at what ages the delaying really starts to accumulate greater benefits, and this can initiate discussions around how that money could or would be used at age 62 vs. 72 or 82. You start to understand the utility of this money in context to your lifestyle at different stages of life. You can also run some analysis about how this timing affects your portfolio withdrawals – both social security income and portfolio withdrawals will be used to cover expenses, so the timing around claiming relates to how you plan out your investment strategies.

To wrap us up, let me leave you with a little homework. Pay a visit to the social security website ( and use the retirement estimator to take a look at what your benefits will be at full retirement age, 62, and 70. I’d suggest printing out these estimates and using this as a launch point to discuss your claiming strategy with your advisor. Your advisor will help you understand all the nuances around different claiming strategies and show you how to decipher your situation’s optimal approach.

If today’s discussion sparked any questions regarding your own situation, feel free to reach out to me at I would love to hear from you.

The Bahnsen Group is registered with HighTower Securities, LLC, member FINRA and SIPC, and with HighTower Advisors, LLC, a registered investment advisor with the SEC. Securities are offered through HighTower Securities, LLC; advisory services are offered through HighTower Advisors, LLC.

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This document was created for informational purposes only; the opinions expressed are solely those of the team and do not represent those of HighTower Advisors, LLC, or any of its affiliates.

About the Author

Trevor Cummings

Private Wealth Advisor, Partner

Trevor is a Private Wealth Advisor focused on building customized financial plans for his and many clients of the team.

As the author of TOM [Thoughts On Money], Trevor endeavors to write and speak about financial concepts and principles in a kind of “straight” talk demeanor and posture.

He received his Bachelor’s degree in Organizational Leadership from Biola University and his MBA from California State University, Fullerton.


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