Recently retired Americans on average started receiving Social Security at age 62, according to an updated report from Nationwide. When asked why they began drawing their benefits from the government, the most frequently cited reasons by surveyed retirees included health problems, exiting the workforce sooner than intended, and an unexpected need for additional income. Regardless of the explanation, such an early retirement means that these Americans are not receiving their full-benefit from the government and unsurprisingly, around one in four respondents said that their regular Social Security payment is “less” or “much less” than they anticipated it would be. On the bright side, surveyed pre-retirees on average reported that they plan to start drawing Social Security at age 66, not quite the full-benefit retirement age but still much later (better) than current retirees.
Among the pre-retirees that said they intend to delay when they start drawing Social Security, 81 percent said that it is because they want to receive the “largest benefit possible.” That could explain why surveyed future retirees believe they will receive an average monthly payment from the government of $1,628, 29.5 percent higher than what the mean current retiree actually collects. Additional help appears available by seeking professional guidance because current Social Security recipients working with a financial advisor were found to collect 21.6 percent more on average from the government than those not consulting with a professional. Ideally, though, the size of a person’s monthly Social Security check will not matter too much if the bulk of his or her retirement income is derived from alternative sources. Encouragingly, many pre-retirees reported having a wide variety of savings accounts, such as tax-advantaged 401(k) plans, and surveyed future retirees were found to be a lot less likely than current retirees to say that Social Security will be their primary source of old-age income.
Sources: Nationwide Retirement InstitutePost author: Charles Couch