Unexpected health care costs and other life events have 23% of retirees—those retired 10 years or less—wishing they had waited before collecting Social Security, according to a survey by the Nationwide Retirement Institute. Thirty-seven percent of retirees say health problems keep them from living the retirement they expected, and 80% of recent retirees say health problems occurred earlier than they had expected.
Twenty-three percent of future retirees either guess or do not know how much their benefit will be, and 29% of current retirees say the benefit is lower than they had expected. In addition, 86% of future retirees do not know what factors determine their Social Security benefit amount.
“The average American claiming at 62 will spend about 61% of his monthly Social Security benefits on health care costs,” says Dave Giertz, president of sales and distribution for Nationwide. “That’s why it’s so important to optimize Social Security. Too many American workers need the money but are missing out on hundreds of thousands of dollars in retirement income by not maximizing the benefit.”
Certainly, online calculators could help, but only 11% of current retirees used one to estimate their benefit. Thankfully, 42% of people not yet retired have used such a calculator. Thirty-two percent of future retirees work with a financial adviser, but only 52% of them say their adviser has discussed Social Security. Seventy-six percent of future retirees who work with an adviser, or plan to, say they would switch to one who would discuss this important benefit. Further, retirees who work with an adviser are much less likely to say that health problems are hindering their retirement (25% vs. 41%).
“The development of Social Security calculators is helping to close the Social Security knowledge gap—and, combined with the holistic perspective of an adviser, American workers can position themselves to live their dream retirement,” says Kevin McGarry, director of the Nationwide Retirement Institute.