It’s rarely (if ever) said about a government-run benefit program—Social
Security enjoys widespread popularity. Yet the majority of the public admit
they know little about how it works and what to expect.
Nearly two in three future retirees say they are not confident in their
knowledge of Social Security. More concerning, just
over half say Social Security will be their main
source of retirement income, followed far behind by just 18 percent of older
adults relying on their pension, according to the Nationwide Retirement Institute.
A quarter of U.S. adults in retirement also say their Social Security
payment is less than expected, and one in four future retirees believe they can
live comfortably in retirement on Social Security alone.
“It’s problematic that so many people are planning to rely solely on
Social Security for income in retirement,” Tina Ambrozy, president of sales and
distribution at Nationwide, said in a statement. “There’s a major disconnect
between what consumers think their Social Security benefit will be—and
cover—compared to reality.”
Eligibility and benefit misconceptions
Most older adults think they are eligible for Social Security benefits
sooner than they actually are, including 57 percent of future retirees.
Most older adults not currently collecting Social Security (53 percent)
don’t plan to start collecting early, with future retirees expecting to collect
Social Security benefits at age 66, on average. Despite those plans, the most
common age at which retirees start collecting Social Security is 62—the
earliest age a person can do so.
Future retirees also expect to receive $1,628 on average as a monthly
payment from Social Security. However, that’s almost 30 percent more than what
current retirees say they collect ($1,257).
There are also key differences between how future retirees anticipate
spending their Social Security compared to how current retirees actually do.
Around four in 10 (41 percent) older adults do not expect to spend any
of their Social Security income on health care, yet 58 percent of recent
retirees report spending their benefit on health care.
Consumers’ social insecurity
A third of future retirees plan to draw Social Security early because
they do not believe Social Security will be around when they reach their full
However, retired Americans who decided to draw early report doing so to
pay living expenses (52 percent) and to supplement their income (43 percent).
Other reasons retirees draw early include being laid off or unemployed (24
percent), having no other source of income (22 percent) and because of health
issues (16 percent).
Click here for the original article from 401k Specialist.