New York Estate Planning & Elder Law Blog
A recent survey conducted by Nationwide Mutual Insurance Company reveals just how far apart the expectations Americans have for their Social Security benefits are compared to the actual payments they will receive upon retirement. According to the survey by Nationwide’s Retirement Institute, more than half of the 1,0000 retirees or soon to be retirees surveys intend to rely on their Social Security benefits as their main source of income during their golden years and may fall well short of their needs.
The results give experts pause for alarm, particularly because of the gap between what those surveyed expect to receive and what they are actually likely to get when they apply for their retirement benefits. Future retirees expect to receive $1,628 per month in Social Security benefits but are more likely to receive $1,257 each month, a difference of almost 30 percent. However, this could be due in part to the fact that those surveyed intended to retire at 66 while many Americans recently retired at 62 which limited their benefits and brought the nationwide average down.
The survey also reveals major disconnects future retirees have about other financial aspects on retirement. Other surveys revealed that almost 40 percent of those on the cusp of retirement do not intend to spend any of their Social Security benefits on health care, an optimistic but unlikely outcome given recent trends in senior health care costs. A recent report by Fidelity Investments showed retired couples will likely spend up to $280,000 on healthcare over the remainder of their lives.
Furthermore, almost 90 percent of those surveyed reported that they were unsure what factors determine the maximum Social Security benefit an individual can receive and only 13 percent of older adults say they have a financial adviser who provides them with Social Security advice. They survey also revealed that those individuals consulting with a financial advisor received 20 percent more in Social Security benefits than those who did not.
Like a 401(k) or other retirement plan, individuals need to get up to speed on how their Social Security benefits work in order to maximize the income they will receive later on in life. By educating one’s self, planning for the future, and staying healthy, we can all live longer and happier lives while accomplishing the things we hope to do in retirement.