While recent research has found more than 90% of Americans would benefit financially from waiting until age 70 to claim maximum Social Security benefits, the 2023 Schroders US Retirement Survey, released today, found only 10% will actually wait and do so.
This includes 17% of non-retired respondents on the verge of retirement (ages 60-65). Overall, 40% of non-retired respondents plan to take their Social Security benefits between 62-65, leaving them short of qualifying for their full retirement benefits.
The choice to forgo larger Social Security payments is a deliberate one, as 72% of non-retired investors—and 95% of non-retired ages 60-65—are aware that waiting longer earns higher payments.
Why are so many non-retired Americans taking their Social Security benefits before age 70?
· 44% said they were concerned Social Security may run out of money/stop making payments
· 36% said they will need the money
· 34% said it was their money and they wanted access to it as soon as possible
· 13% said they were advised to take it earlier than age 70
“We have a crisis of confidence in the Social Security system and it’s costing American workers real money,” said Deb Boyden, Head of US Defined Contribution at Schroders. “Fear about the stability of Social Security has people walking away from money that could improve their quality of life in retirement. Many are not even waiting for their full benefit let alone the maximum, which means they will have to create more income on their own, making it even more important to save and invest earlier for retirement.”
When to claim Social Security benefits is a critical decision for older Americans, but analysis of when people actually claim shows most people leave big money on the table by claiming too early.
To wit, Social Security retirement benefits taken at age 70 are 76% higher, adjusted for inflation, than benefits taken at 62, according to 2022 research from the National Bureau of Economic Research.
That same research found all U.S. workers ages 45 to 62 would benefit from waiting until beyond age 65 to start receiving benefits, and more than 90% would benefit financially from waiting until age 70 to claim. But—like the new Schroders survey found—only about 10% of workers actually wait oer plan to wait until age 70 to claim.
The NBER research found people leave a median household loss of $182,370 on the table by not waiting until age 70 to claim.
SEE ALSO:
• 4 Senators Want Americans to Wait Until 70 to Claim Social Security
• Here’s How Much Waiting Until 70 Boosts Social Security Income
• Latest Social Security COLA Forecast Projects Increase of 3%