Social Security has historically been a major part of many Americans' retirement income. However, the 2024 Annual Retirement Study by Allianz Life suggests many people are uncertain about the role Social Security will play in their attempts to have a financially secure retirement. The Allianz data found that regardless of generation, people harbor fears about retirement planning, including the solvency of Social Security.
This new survey, which drew responses from 1,000 individuals, has revealed wide knowledge gaps among Americans regarding Social Security. Most respondents agreed they were unsure how the benefit fits into their retirement plans.
You might expect younger workers to have not spent much time learning about Social Security. In fact, the 2024 study highlights that millennials and Generation X are more likely not to understand it. A whopping 60% of millennials and 51% of Generation X admitted that they have limited knowledge of It, while just 23% of baby boomers over the age of 60 admitted to being uncertain about It.
This study revealed that many Americans are unclear about when they should begin claiming Social Security benefits. Fifty-three percent of survey respondents, including 57% of millennials and 56% of Gen Xers, do not have an idea of the optimal time to claim Social Security. With this in mind, it is unsurprising that nearly one in four baby boomers (23%) still need a plan for when they will begin to claim their own Social Security benefits.
The good news is that 71% of baby boomers do have a plan for when to claim Social Security. However, the study also found that 57% of Americans are concerned that Social Security may not be around throughout their retirement.
Most people will need additional income sources beyond Social Security to maintain their standard of living in retirement, even if they have strategized to maximize their Social Security benefits.
What you don't know about Social Security can hurt you. These are a few of the common things people don't know.
-Widows (or Widowers) will not continue to receive both spouses' benefits after one spouse passes.
-Social Security Benefit Can Be Taxable
-If you take Social Security before retirement age and continue to work, some or all of your benefits may be clawed back.
As of July 2024, the average retiree receives $1,919.40 monthly from Social Security. Many are receiving more, and many recipients receive less.
For those claiming Social Security benefits early, at age 62, the maximum Social Security benefit is around $2,710 per month. If you wait until your full retirement age, your maximum Social Security benefit in 2024 will be about $3,822 monthly. Waiting from 62 to full retirement age increases your amount by around 30% each month.
For those looking to get the absolute maximum Social Security benefit possible, you will need to wait until age 70. The maximum Social Security benefit at age 70 will be nearly $4,873 per month. Waiting until 70 is a smart money move for those expecting to live a long time and/or who are still working well into their 60s and beyond.