Americans have the ability to start withdrawing from their social security at an earlier age, but this isn’t always the most optimal situation.

Why More Americans are Claiming Social Security Benefits Earlier, Schroders Survey Results Summary

 
 

Withdrawing from Social Security

Schroders has conducted a comprehensive survey of 2,000 US investors across the nation to delve into the landscape of retirement readiness, planning, and the primary concerns associated with retirement. The survey also explores the current sentiments of those who are already in retirement. You can access the full report by following this link to the Schroders 2023 U.S. Retirement Survey. 

Social Security Sentiment is Shifting

The survey findings reveal a shifting trend in the claiming of social security benefits among Americans. Approximately 10% of respondents plan to delay claiming their Social Security until the age of 70, while 40% aim to claim between the ages of 62 and 65, preceding their full retirement age.

Here are the primary reasons individuals are opting to initiate their Social Security withdrawals earlier:

  • 44% Concerned about Solvency: Worries about the solvency of Social Security offices before reaching the age of 70 drive 44% of individuals to start withdrawals, not willing to take the risk.

  • 36% Immediate Financial Need: A significant 36% require the money now, addressing immediate financial needs.

  • 34% Desire for Access: 34% recognize Social Security as their money and wish to begin utilizing and enjoying it.

  • 13% Financial Advisor's Advice: Financial advisors have recommended 13% to commence withdrawals before reaching 70.

While it's possible to start withdrawing from Social Security at 62, doing so incurs a ~30% reduction from the full benefit. Waiting until after the full retirement age (currently between 66 and 67) allows you to withdraw the full monthly amount.

Factors such as low income, health concerns, or financial stress often prompt early withdrawals. A proactive approach that may help you from withdrawing too early involves prioritizing pre-retirement savings, reducing dependence on Social Security.

According to the Schroders Survey, the average monthly income required for non-retired Americans to achieve a comfortable retirement is:

$59,000 annually
$5,135 per month for Millenials
$4,855 per month for those nearing retirement (age range of 60-65)

The average monthly income required for retired Americans to achieve a comfortable retirement is:

$50,000 annually
$5,075 per month for those with a financial advisor
$5810 per month for those with a formal financial plan

Illinois retired couple vacationing and sitting by a lake

Retirement for Illinois residents can be complicated and costly, especially if you want to add travel. It is important to work with a planning professional to make sure you properly prepare for your retirement years.

Do You Need Help with Retirement Planning and Social Security Optimization?

Elevate your financial future with Significant Wealth Partners, where we specialize in comprehensive financial planning for Illinois residents. Our core emphasis lies in meticulously guiding clients through the evaluation and optimization of their retirement strategy, ensuring they make informed decisions about their financial future. Discover the potential of efficient utilization of social security benefits with our expert guidance. Call us today at 847-639-7830 to explore our array of services and let Significant Wealth Partners be your trusted partner in minimizing financial concerns and maximizing peace of mind.

We invite you to visit the Social Security survey summary video on Yahoo Finance here:
https://finance.yahoo.com/video/why-more-americans-claiming-social-205229683.html