Millions of Americans depend on Social Security as the financial foundation of their retirement. Yet, nearly 70% percent of older people cannot correctly identify the age at which they are eligible for full retirement benefits.
That finding — courtesy of a recent survey by the Nationwide Retirement Institute — has profound implications for how well people will live in retirement. Take benefits too early, and you risk collecting less money during your golden years.
The average respondent to the survey guessed that they would be eligible for full retirement benefits at age 63.
In fact, full retirement age ranges from 65 to 67, depending on when you were born. For your exact full retirement age, see the “Age to Receive Full Social Security Benefits” chart from the U.S. Social Security Administration (SSA).
Overall, the survey reveals an alarming ignorance about how Social Security works. Tina Ambrozy, president of sales and distribution at Nationwide, says:
“Social Security is one of the most confusing retirement topics that America’s workers are facing today. In fact, our survey reveals fewer than 1 in 10 older adults know what factors determine the maximum Social Security benefit an individual can receive.”
The Nationwide Retirement Institute conducted the survey in February with 1,315 participants. All participants were age 50 and older and currently collect or plan to collect Social Security benefits and also are retired or plan to retire within the next 10 years.
Other Social Security misconceptions
Other findings from Nationwide’s survey suggest that some older people might overestimate their benefits.
For example, 26% of survey respondents thought their benefit would increase at full retirement age, even if they started taking benefits before that time. That is not true, as we detail in “7 Social Security Blunders That Can Ruin Your Retirement.”
Additionally, 26% of respondents believe they can live comfortably on Social Security alone.
“But Social Security was never meant to be the only source of income for people when they retire,” says the SSA. “Social Security replaces a percentage of a worker’s pre-retirement income based on your lifetime earnings.”
How to boost your Social Security payment
While the survey results are troubling, they also can serve as a wakeup call to get your own retirement scheme in order.
In fact, a little planning can go a long way to helping you squeeze as much money from Social Security as possible.
For example, carefully think your situation through before claiming your retirement benefits at the earliest possible age, which is 62. As we explain in “12 Ways to Maximize Your Social Security Checks“:
“If you start receiving benefits right at age 62, your checks will be forever 20 to 30 percent smaller than if you had waited until you reached your full retirement age.”
Of course, everybody’s situation is different. As Money Talks News founder Stacy Johnson has written, there are times when claiming early — even as early as age 62 — likely makes sense.
To learn more about such situations, check out “5 Reasons You Should Not Delay Claiming Social Security.”
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