Almost all Americans say they are planning to ignore a key piece of Social Security advice, which means they will miss out on higher monthly payments.
Only 10 percent of those still working plan to wait until they are 70 before they start claiming benefits, according to new findings from investment firm Schroders.
Americans can begin claiming Social Security as early as 62, but doing so permanently reduces their monthly payments.
To receive a full retirement benefit, workers must wait until their full retirement age, which currently stands at 67.
However every year after full retirement age that Americans delay claiming Social Security, their payment will increase by 8 percent.
That means those who wait until 70 can lock in the highest possible monthly checks — a strategy long touted by financial planners.
According to a study from the National Bureau of Economic Research, people who claim before age 70 are wasting an average of $182,000.
Leaving money on the table is a deliberate decision for most non-retired Americans, according to Schroders. Some want immediate access to the money, while others fear Social Security could run out of funds before they get their fair share.
The majority of Americans say they are planning to ignore a key piece of Social Security advice
Some 37 percent of people surveyed by Schroders said they would not wait to claim Social Security as they were keen to access the funds as soon as possible.
As inflation remains elevated, many Americans are feeling squeezed by higher living costs and are struggling to save for retirement.
Meanwhile, 36 percent said they were concerned Social Security may run out of money or may stop making payments to seniors.
According to forecasts released earlier this year, Social Security’s retirement fund is indeed set to run short in just seven years — which could end up slashing benefits for millions of Americans by thousands of dollars a year.
According to latest projections, retirees could face automatic 24 percent benefit cuts as early as the end of 2032. This means a couple who both worked would receive $18,100 less each year if they retire at the start of 2033.
Social Security relies on its trust fund to provide monthly benefit checks to around 70 million Americans.
Once the reserves are exhausted, federal law requires that benefits be cut to match incoming revenues.
This means payments would still continue, but at reduced levels.
Some 36 percent of people surveyed said they were concerned Social Security may run out of money or may stop making payments to seniors
According to forecasts released earlier this year, Social Security’s retirement fund is set to run short in just seven years
According to the Schroders survey, 34 percent of people said they would not wait as they would need the money earlier for regular income, while 15 percent said they were advised to take Social Security earlier than age 70.
‘The income generated from monthly Social Security payments is critical to making ends meet in retirement for many Americans,’ said Deb Boyden, head of US defined contribution at Schroders.
‘Clearly, reports questioning Social Security’s solvency have workers anxious to tap into their benefits sooner rather than later, but with many Americans facing a large savings gap, holding off on claiming benefits can have a meaningful impact on your finances in retirement.’
It comes as seniors anxiously wait to find out how much their Social Security payments will rise next year.
The cost-of-living adjustment, or Cola, is an annual uplift to payments which is designed to keep up with inflation.
It is announced every year when the Labor Department releases the Consumer Price Index data for September, which has been scheduled for October 24.
This is later than usual due to the ongoing government shutdown.
