Worries about the future of Social Security are on the rise among Americans aged 50 and above, according to a recent survey by the Nationwide Retirement Institute.
The survey, conducted between May and June and involving 1,806 participants, reveals that an alarming 75% of individuals in this age group are concerned that Social Security will deplete its funds within their lifetimes.
This figure has increased from 66% recorded in 2014. These concerns are intensifying as the depletion dates for the program’s funds draw near.
Social Security’s combined funds are projected to run out in 2034, with only 80% of benefits remaining payable.
The Growing Concern
The looming uncertainty surrounding Social Security’s future is causing anxiety among those nearing retirement age.
Despite this, it’s crucial to focus on individual strategies rather than fret over the program’s outlook. Experts recommend two key actions to maximize benefits:
1. Tailor Your Claiming Strategy to Your Personal Situation
While apprehension about Social Security’s future often drives individuals to claim benefits early, it’s essential to remember that the best strategy varies from person to person.
Experts advise determining your full retirement age, which is when you’re eligible for 100% of the benefits you’ve earned. Waiting until this age is not necessarily the best approach for everyone.
Even if lawmakers don’t make changes before the projected depletion dates, the average retiree can still expect to receive approximately 77 cents on the dollar.
Therefore, it’s crucial to target a claiming strategy that optimizes your benefits.
2. Educate Yourself on Social Security Rules
Social Security comes with a complex set of rules, and misconceptions abound. Nationwide’s survey found that only 49% of adults believe they know how to maximize their benefits correctly.
Surprisingly, just 13% of respondents can accurately guess their full retirement age. One common misconception is that benefits will increase at full retirement age, even if claimed early, which is not the case.
Once you elect to start receiving benefits, the amount is locked in.
To avoid costly mistakes, experts advise studying Social Security’s rules carefully, including information provided by the Social Security Administration.
Setting up an online Social Security account can help estimate your retirement benefits and ensure your earnings history is accurate.
When seeking guidance, it’s advisable to consult a financial advisor who specializes in Social Security, as the workers in Social Security offices may not be experts in claiming strategies.
While concerns about Social Security’s future funding persist, individuals approaching retirement age can take proactive steps to secure their financial well-being.
By tailoring their claiming strategies to their personal situations and educating themselves about the program’s rules, Americans can navigate the uncertainty surrounding Social Security with greater confidence.
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