The most popular ages American non-retirees plan to file for Social Security benefits are 65 (23%) and 62 (12%), even though half of non-retired Americans report they are “concerned” or “very concerned” about outliving their assets in retirement.
That’s according to the Schroders 2024 U.S. Retirement Survey, which also found that 43% plan to take Social Security before age 67 – the full retirement age for those born in 1960 or later. Only 1 in 10 pre-retirees plan to wait until at least age 70 – when an individual reaches the maximum monthly benefit.
Reasons for Filing Early
The survey authors report that 74% of non-retired investors are aware that waiting longer earns higher payments. Non-retirees cited a variety of reasons for taking Social Security early:
• Will need the money (39%)
• Concerned Social Security may run out of money or stop making payments (38%)
• Want access to the money as soon as possible (36%)
• Advised to take it earlier than age 70 (12%)
“There is no one-size-fits-all answer for when to file for Social Security,” said Deb Boyden, head of U.S. Defined Contribution at Schroders. “However, delaying benefits for as long as possible can add several hundred dollars to those monthly checks. With so many Americans behind on retirement savings, waiting to collect Social Security benefits can have a significant impact on your quality of life during your decumulation years.”
Non-retirees on average predicted that to live comfortably they would need $4,947 per month. That’s higher than the $4,258 of monthly income today’s retirees report they are generating.
Workplace Retirement Plan Participants
Among those participating in a workplace retirement plan, 50% said their primary investment objective was to generate steady income; 41% said it was to grow assets; and 9% said to protect assets. The authors report that 94% said they would be interested in a retirement investment product from their employer that actively manages the risk of loss while seeking to grow assets at a rate equal to the current cash rate plus 5%.
Among plan participants, 38% said their plan provided a retirement income solution (up from 31% in 2023); 36% said they didn’t know; and 26% said no. And 90% of those who are offered an income solution in their plan say they are likely to use it.
Scared About No Paycheck
Among non-retirees, 57% said the idea of no more regular paychecks is concerning, and 22% described it as terrifying.
The top income sources, aside from Social Security, that non-retired Americans expect to draw upon after retiring include:
• Cash savings (60%)
• Workplace 401k, 403b or 457 plan (48%)
• Spouse’s workplace 401k, 403b or 457 plan (37%)
• Investment income (36%)
• Spouse’s pension plan (27%)
Income Strategies
Most retirees lack strategies to generate income in retirement, with 53% saying they take money when they need it. Among those with a strategy for generating income, the top three are:
