Newbie retirees may need to lower their expectations when it comes to their Social Security checks.
According to a new survey released by the National Retirement Institute, more than a quarter (27%) of new retirees say their monthly checks are less than they expected.
What’s more, nearly two in three of soon-to-be retirees (63%) admit that they are not confident in their overall knowledge of how Social Security works.
That number is alarming because nearly one in four (26%) future retirees believe they can live comfortably on Social Security alone.
“It’s problematic that so many people are planning to rely solely on Social Security for income in retirement,” says Tina Ambrozy, president of sales and distribution at Nationwide. “There's a major disconnect between what consumers think their Social Security benefit will be – and cover – compared to reality.”
The biggest problem is that most adults think they are eligible for the benefits sooner than they actually are. The most common age to start collecting is 62, which is also the earliest age a person can do so.
But a majority (about a third) say they don’t care about withdrawing too early as many of them don’t believe Social Security will even be around when they reach their full retirement age.
According to the report, future retirees expect to receive $1,628 a month on average, but that amount is almost 30% more than what current retirees say they are collecting. Today, the average monthly rate reported is $1,257.
Ambrozy says one of the best ways for people to fully understand what their benefits are and what they will truly cover is to contact a professional for advice.
However, the survey found that only 13% of older adults say they have a financial adviser who can give them Social Security advice.
“It’s not that they don’t want the advice. In fact, nearly three in four (72%) future retirees currently working with a financial advisor say they would likely switch financial advisors to work with an advisor that can help them maximize their Social Security benefits,” the report says.