Social Security Claiming Still a Mystery for Americans
Recent reports suggest that Americans don’t plan on maximizing their Social Security benefits to their full potential. A new Allianz Life study homes in on this struggle.
The 2025 Annual Retirement Study from the Allianz Center for the Future of Retirement, part of Allianz Life Insurance Company of North America, reports that 55% of survey respondents aren’t sure how Social Security will “fit” into their retirement plan, showing a lack of strategic planning on their end.
Others (46%) report feeling worried about maximizing Social Security income in retirement.
“Social Security is a key part of a retirement strategy – the benefits provide guaranteed income for a lifetime that increases with cost-of-living adjustments and is tax advantaged,” says Kelly LaVigne, vice president of consumer insights at Allianz Life. “But, taking full advantage of the program to best suit your retirement strategy involves careful planning and making informed decisions. Without a plan for Social Security, a retirement strategy is not complete.”
Baby Boomers, many who are currently in retirement, were the most likely to say they have a plan for Social Security claiming (77%) compared to 30% of Generation Xers and 23% of Millennials. Of all respondents, just 39% have organized a strategy for claiming in retirement.
The absence of strategy could be due to a lack of faith in the system. Recent Cerulli research found that 58% of Generation Z and Millennial 401(k) participants expect their personal retirement accounts to be their primary source of income in retirement, while only 5% of Gen Z and 16% of Millennials expect it to be Social Security.
Social Security insolvency, expected to begin in 2033, will only allow the Social Security Administration (SSA) to pay out 77% of claimed benefits.
In Allianz Life’s study, 67% of respondents report worrying about the availability of Social Security benefits throughout their retirement, up from 57% last year.
Knowledge gaps
Despite avoiding to organize a retirement income strategy, 53% of Americans in the research expect Social Security to be a major source of retirement income, with some believing that the benefit alone will fund their retirement, Allianz Life reports. This is even as Social Security benefits generally only replace nearly 40% of the average worker’s wages, according to the Social Security Administration.
Others believe they’ll receive maximum Social Security benefits at age 65 (55%). While Americans are eligible for Social Security benefits at age 62, claiming earlier than the full retirement age (FRA) can reduce the number of benefits received. According to the Social Security Administration, those who claim at 62 will receive a 30% reduction in benefits than if they claimed at their FRA of 66 or 67.
Most respondents (73%) believe it is “best to wait as long as possible” to claim benefits, but Allianz Life argues that life factors, including health, life expectancy, taxes, and sources of retirement income, could cut this expectation short.
“A financial professional can help educate you on Social Security and how it could fit into a retirement income plan for you,” LaVigne says.
Amanda Umpierrez is the Managing Editor of 401(k) Specialist magazine. She is a financial services reporter with nearly a decade of experience and a passion for telling stories and reporting news. She is originally from Queens, New York, but now resides in Denver, Colorado.
