Even though 86% of Americans know that delaying Social Security to age 70 would dramatically increase their monthly benefit, only 11% plan to do so, according to the third installment of the Schroders 2022 U.S. Retirement Survey released Tuesday.
Almost one-third (31%) of the 1,000 investors surveyed said they would not wait until 70 to claim the maximum possible benefit because they expected to need the money sooner. In fact, almost half (48%) said they would claim their monthly benefit before hitting their full retirement age.
Joel Schiffman, Schroders' head of strategic partnerships, bemoaned the low uptake on delaying Social Security benefits to age 70. "If only 11% are maximizing their Social Security checks, almost 90% are leaving much-needed retirement income on the table," Mr. Schiffman said.
The survey painted a bleak picture of Americans' retirement readiness, with 86% of those on the cusp of retirement — Americans age 60 to 65 — saying they were "concerned" or "terrified" by the idea of not having regular paychecks.
Adding to the gloom, more than half of American pre-retirees (55%) didn't believe they'd be able to replace 75% of their last paycheck, "a ballpark figure many advisers use for retirement planning purposes," Mr. Schiffman said.
Mr. Schiffman noted that an earlier installment of the survey showed that few pre-retirees had a written retirement plan to guide their decisions, with only 23% having done one.
"Not enough is being done by plan participants in terms of planning," Mr. Schiffman said, adding that having an income strategy in place is crucial to avoid running out of money in retirement. Mr. Schiffman cited annuities, dividend-producing stocks, and systemic withdrawals from retirement accounts as potential strategies retirees can use to generate retirement income.
With inflation running at 9% and the market down 20%, "you have to be able to retain your assets because the greatest fear of all is outliving your assets," he said.
The survey was based on 1,000 U.S. investors age 45 to 75 and was conducted from Feb. 17 to Feb. 28.
