4. They don’t know the best way to increase their retirement security
People nearing retirement whose savings are coming up short have a few good options for increasing their retirement security. One is to keep working for a couple of years past their planned retirement date. Another is to put off claiming Social Security benefits for two years. (You’ll get an extra 8% for every year you wait to claim until age 70.) But more than half of people surveyed didn’t pick either of these options when asked what they could do to increase their retirement security. One-third thought saving an additional 3% in the five years before retirement was the best strategy, and 25% didn’t know what they should do.
Let’s look a bit closer at boomers’ Social Security knowledge.
5. They don’t know how to get more money from Social Security
Waiting to claim Social Security is one way to increase your retirement income, and it’s an especially smart strategy if you expect to live a long time. But 40% of survey respondents weren’t aware their benefits would increase for every year they wait to claim between age 62 and 70. And just under half didn’t realize a single person who expected to live until age 90 would be best off waiting until age 70 to start getting their Social Security checks.
Curious whether you should take Social Security now or wait? A break-even analysis will show you how long you’ll need to live in order to come out ahead if you wait to take benefits.