Many financial advisors say that you should wait until you’re 70 to receive your Social Security benefits so that you’ll receive a higher monthly payout. However, a new study indicates that most Americans are not interested in doing so. Even though many workers are aware of the financial advantages of waiting, many set a plan to claim their money years in advance of the time. The motivations include rising concerns about retirement savings, health, cost, and even worries about the future of Social Security.
Most Americans Don’t Want to Wait Until 70
Despite the fact that waiting until age 70 to collect Social Security benefits can boost monthly payments, just a small number of workers are planning to wait that long to claim benefits, according to the study.
Claiming Early Comes With a Big Trade-Off
Workers can start collecting Social Security as early as age 62, but doing so permanently reduces monthly benefits by roughly 30% compared to waiting until full retirement age.
Waiting Longer Can Boost Payments Substantially
Many financial experts recommend waiting until age 70 because benefits continue increasing each month that claiming is delayed. Over time, this can result in significantly higher lifetime income.
Many Retirees Simply Need the Money Sooner
For many Americans, delaying benefits simply isn’t realistic. Rising living expenses, financial pressure, and limited retirement savings often force retirees to begin collecting income as soon as they become eligible.
Health Concerns Also Influence the Decision
Some older people select early benefits since they might not live long enough to reap the rewards of waiting. Retirement timing decisions are strongly influenced by health issues and life expectancy.
Don’t Fully Understand Social Security
Many Americans still do not fully understand how Social Security fits into their retirement plans, including how much they replace once they are no longer in the workforce, according to another study.
Fears About Social Security’s Future Are Growing
Concerns about the future stability of Social Security are also influencing retirement decisions. Some workers worry that future benefit reductions or program changes could make waiting riskier.
Retirement Planning Is Becoming More Difficult
The cost of housing, inflation, and low savings are complicating retirement decisions. Social Security has been transformed for many Americans from a quest to get as much as they can to a race to survive financially.
