Social Security

Future retirees often overestimate Social Security benefits

Take a look‼️ Are you among those who have mistaken views about Social Security? One extreme says Social Security won’t be there in the future and the other overestimates the retirement benefit.

Social Security is a complex source of retirement income, often causing a disconnect between what consumers think their benefit will be compared to reality,” said Tina Ambrozy, president of sales and distribution at Nationwide. “Preparing for retirement holistically by working with advisers and taking advantage of online tools can help older adults maximize benefits and achieve personal goals.”

The online survey of more than 1,300 older adults who are retired or who plan to retire in the next 10 years, found that nearly half — 44% — say Social Security will be their main source of retirement income, followed by just 23% of older adults who say they will rely on a pension.”.

On average, future retirees incorrectly believe they will be eligible for full benefits at age 63, rather than their full retirement age of 66 or later, and 26% incorrectly believe that if they claim Social Security early, their benefit will automatically go up once they reach full retirement age.

Future retirees expect to receive $1,805 a month in Social Security benefits, but retirees currently collecting Social Security receive $1,408 per month on average — a 28% difference.

Source: Future retirees often overestimate Social Security benefits

3 replies »

  1. which is better for income…taking social security at age 62 and investing it in stock market or waiting until age 70 for full benefits ??

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    • I say neither for income. But assuming that the market returns are positive and above inflation, you might have more wealth by the time you die. The reason I say neither for income is if you can afford to invest part or all of it into the stock market, you didn’t need it for income. If you waited until age 70, you didn’t need it for income from age 62 to 70 and you probably won’t need it after age 70 because you probably have other retirement income. Depending if you have a Roth IRA or 401K, the tax liabilities are different and you have mandatory distributions with a 401K so you just can’t let it sit there and grow if it is in stocks (generally speaking). So, maybe investing your social security in the stock market and only paying capital gains taxes on withdraws instead of ordinary income tax might be a plan worth investigating depending on how your beneficiaries get your estate. It is an interesting question.

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