Fully 86% of non-retired Americans aged 45 and older know they could receive higher Social Security payments by delaying the start of their benefits.
Yet just 11% of respondents plan to wait until age 70—the age at which an individual reaches their maximum monthly benefit—to begin taking their Social Security benefits.
Almost one-third said they would take benefits before 70 because they are concerned Social Security may run out of money, and 31% said they expected they would need the money sooner, according to the Schroders 2022 U.S. Retirement Survey.
Nearly half of non-retired Americans surveyed plan to begin taking Social Security between the ages of 62-65 (before reaching full benefit), 19% plan to file between ages 66-69, and 22% are unsure when they will claim Social Security.
Even among those not retired and approaching retirement age, only 11% said they would take their benefits at age 70. Why? Because they will need the money sooner, according to 38% of these respondents.
“Delaying Social Security to increase your benefit is a tried-and-true means of generating more income in retirement, but it’s a path few are prepared to take,” Joel Schiffman, Head of Strategic Partnerships at Schroders, said in a statement. “This validates what we found in our survey last year when we first saw that only ten percent planned to wait until age 70 to take higher benefits. Given increasing life expectancies and widespread concerns about not being able to live comfortably without a paycheck, the advantages of creating a retirement income strategy that maximizes your Social Security benefits can’t be overstated.”
Disappearing paycheck
Among non-retired survey respondents nearing retirement, 55% don’t believe they will be able to replace 75% of their last paycheck in retirement income. And the vast majority don’t think they will have to: just 23% said they needed to replace 75% of their final paycheck to live comfortably. They are more likely to say they will need to replace less than 50% of their last paycheck.
Of significant concern, almost one-quarter of those nearing retirement have no idea how much monthly income they will need to generate in retirement to live comfortably, and most are concerned or terrified by the thought of no more regular employment paychecks.