When it comes to Social Security, there is a lot that America’s workers nearing retirement don’t know. The sixth annual survey from the Nationwide Retirement Institute, conducted online by The Harris Poll among 1,315 U.S. adults ages 50 or older who are retired, or plan to retire in the next 10 years, finds that nearly half (44%) say Social Security will be their main source of retirement income, followed by just 23% of older adults relying on their pension. Here are some of the disturbing facts:
- 70% believe they are eligible for full benefits before they actually are. On average, future retirees incorrectly believe they will be eligible for full benefits at age 63, and 26% think if they claim early, their benefits will automatically go up once they reach full retirement age.
- Current retirees that drew early say they needed the money to pay for living expenses (61%), to supplement their income (36%), because they were laid off (26%), had no other source of income (24%) or had health issues (22%).
- Only 22% of future retirees have a formal written retirement plan, and almost a third (30%) say they did less Social Security planning because it’s too confusing.
The good news is that those working with a financial advisor report receiving more benefits and having a more secure retirement. Specifically:
- Receiving almost 15% more in benefits than those who do not—$1,551 versus $1,324
- Being less likely to plan to draw benefits before full retirement age—68% versus 55%
- Being more able to do the things they wanted in retirement—90% versus 56%
Perhaps most critically, only 46% of future retirees have received advice on Social Security from a financial advisor. If a financial advisor could not show them how to maximize Social Security benefits, 76% of future retirees who currently work with—or plan to work with—an advisor say they would likely switch and find an advisor who could advise on Social Security.
You can find more results and commentary about the survey here.