Older Americans – including current and future retirees – seem to have a misunderstanding lack of social security knowledge and how it can increase their retirement income streams, according to a new Nationwide Retirement Institute report.
"What is a little disappointing is that there is still an incredible number of misconceptions about social security," said Tina Ambrozy, CFO at Nationwide, to FOX Business. "The report showed that people really do not understand how Social Security works … [down to] even understands what your income would be. "
People tend to exceed the size of their social security benefits, the results show. Future pensioners expect to receive $ 1
Ambrozy said the disconnection is "alarming", but findings also show that someone believes you are starting to collect for 62 years will check. your actually increase when you reach 65. In fact, the reduction of benefits for those claiming that 62 is 25 percent, 20 percent for those who claim 63, 13.3 percent aged 64 and 6.7 percent by 65.  The average The total retiree began to collect 62. However, delays when collecting, when possible, can actually increase the employee's benefit by as much as 32 percent.
However, about 25 percent of people think they can live on social security alone – even though the program was designed to be a supplement, not the primary form of retirement income.
As previously reported by FOX Business, the annual trustee report estimates that Social Security will not be able to pay full benefit by 2035, as trustees predict that the program's reserve fund will be exhausted. At that time, only 80 percent of the benefits will be paid.
Only 8 percent of the population were able to identify the factors that determine the maximum benefit a person can receive – including work history, age, breakdown start date, and marital status.
The lack of knowledge – and planning – has barely changed in the six years Nationwide has conducted the survey, Ambrozy noted.
Although a little less than half of the people said they were safe or very confident in their social security, people did not always ask the answers.
Only 30 percent of people know that if they do not work for at least 35 years, their benefit will be reduced. Only a slightly higher percentage of people knew that someone who earns $ 150,000 pays as much in social security tax as a millionaire. Less than half of respondents knew Social Security was protected from inflation, while about one-third of people believed that benefits were tax-free.
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However, working with a Financial Advisor has proven to help. According to the survey, those working with an expert had 15 percent higher lifetime income benefits – $ 1,511 against $ 1,324.
The survey was conducted on February 21-21 among more than 1,300 people, including early retirement (50-year-olds), recently retirees and people who have been retired for at least 10 years.