Two of every 5 non-retired Americans plan to take their Social Security benefits before hitting their full retirement age, according to the 2023 Schroders U.S. Retirement Survey released Tuesday.
The choice to forgo larger Social Security benefits is a deliberate one, as 72% of non-retired investors — and 95% of workers ages 60-65 — are aware that waiting longer earns higher payments, the survey found.
Only 10% said they will wait until 70 to receive maximum Social Security benefits.
Many Americans (44%) said they are planning to claim their benefits before 70 because they are concerned that Social Security might run out of money.
"Fear about the stability of Social Security has people walking away from money that could improve their quality of life in retirement," said Deb Boyden, Schroders' head of U.S. defined contribution, in a news release. "Many are not even waiting for their full benefit let alone the maximum, which means they will have to create more income on their own, making it even more important to save and invest earlier for retirement."
Apart from fears over the stability of Social Security, some Americans (36%) cited needing the money as a reason for claiming benefits before 70, while others (34%) said it was their money and they wanted access to it as soon as possible.
The study also found that working Americans had low final paycheck income-replacement expectations, with 55% saying they believe they will need to replace less than 75%. Only 23% believe they will need to replace 75% or more. About 1 in 5 (22%) had no idea how much they would need to replace.
The survey was conducted by 8 Acre Perspective among 2,000 U.S. investors nationwide ages 27-79 from Feb. 13 to March 3.