Only 8% of Workers Say They'll Wait Till 70 for Social Security: Survey

Half of non-retired Americans said they are concerned or very concerned about outliving their assets in retirement, Schroders reported in a new survey this week.

At the same time, 43% of respondents said they plan to take Social Security before they turn 67, the full retirement age for those born in 1960 or later. Twenty-three percent said they would start their benefits at 65, and 12% said they would do so at 62.

Only 8% said they would wait to claim until age 70, when they will reach their maximum monthly benefit.

The decision to sacrifice Social Security income is not an oversight for most Americans, Schroders noted, as 74% of non-retired investors are aware that waiting longer earns higher payments. Rather, they are doing so for these reasons:

• Will need the money: 39%
• Concerned that 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 earlier than age 70: 12%

“There is no one-size-fits-all answer for when to file for Social Security, however, delaying benefits for as long as possible can add several hundred dollars to those monthly checks,” Deb Boyden, head of U.S. defined contribution at Schroders, said in a statement. 

“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.”

8 Acre Perspective conducted the survey from March 15 to April 5 among 2,000 U.S. investors nationwide ages 28 to 79, including 780 who currently participate in a workplace retirement plan.

Search for Retirement Income

The survey found that 88% of non-retired Americans are at least somewhat concerned about not knowing how best to generate income during retirement.

Asked to forecast how much monthly income they will need to live comfortably after leaving work, non-retiree respondents said $4,947 on average, which is higher than the $4,258 of monthly income that today’s retirees report they are generating, according to Schroders.

Among respondents who participate in a workplace retirement plan, 50% said their primary investment objective is to generate steady income, 41% said it is to grow assets and 9% said to protect assets. 

Consistent with these objectives, 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%.

Thirty-eight percent of plan participants said their plan provides a retirement income solution, up from 31% in 2023. Thirty-six percent said they do not know whether their plan does, and 26% said theirs does not. Nine in 10 of those who are offered an income solution in their plan say they are likely to use it.

Among those who do not know or do not have a retirement income solution in their plan, 62% wished their plan did have one, 29% were unsure and 9% said that one is not necessary.

Concerns Over Losing Paychecks

Fifty-seven percent of non-retired survey participants said the prospect of no longer receiving regular paychecks is concerning; 22% described it as terrifying. 

Asked whether they would be able to replace at least 75% of their last paycheck in retirement income, only 10% said they definitely would be able to do so. Forty-one percent said they probably would, 37% said probably not and 12% said they definitely would not be able to come up with that amount.

Besides Social Security, non-retired Americans said they expect to draw on these sources of income after retiring:

• Cash savings: 60%
• Workplace 401(k), 403(b) or 457 plan: 48%
• Spouse’s workplace retirement plan: 37%
• Investment income: 36%
• Spouse’s pension plan: 27%

According to the survey, a majority of retirees do not have specific strategies to generate income in retirement, as 53% said they just take money when they need it. 

Twenty-three percent of those with a more formal approach reported that they generate income dividend-producing stocks or mutual funds, 22% do so through systematic withdrawals from retirement accounts and 17% generate income through certificates of deposit.

“The transition from retirement savings accumulation to the decumulation phase is not an easy one to make,” Boyden said. 

She noted that with working Americans increasingly looking to their employers for answers, plan sponsors and asset managers can work together to develop solutions that create a stronger bridge between the asset accumulation and decumulation phases.

The idea, she said, is to grow and preserve plan participant wealth while providing an opportunity to optimize the timing of Social Security benefits.

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