New Study reveals social security misperceptions

Michael Bisbee, CFP®, EA, MBA
Enduro Financial

Enduro Financial empowers clients to make wise decisions with their personal finances today so they can pursue their Personal Best! We coach our clients through complex financial decisions by "Running the Numbers" so they can optimize their most important resources- time, energy, and money. We also help client's uncover their behavioral strengths and weaknesses regarding personal finance, so they can align their daily personal finance habits with their long-term goals and values.

Michael Bisbee is a CFP® Professional, EA Tax Expert and founder of Enduro Financial, a Fee-Only Investment Advisory registered in Idaho and California. Services include Financial Planning and Tax Preparation.

Seven in ten pre-retirees incorrectly believe they will be eligible for full Social Security benefits at age 63, and 26% incorrectly believe their benefits will increase when they reach full retirement age, according to a new national survey.1


Social Security, for many, is one of the most important and reliable retirement income sources, yet it can be complex and confusing even for some of the most financially savvy pre-retirees and retirees. Pre-retirees on average overestimate Social Security benefits by 28%, expecting to receive $1,805 a month (versus the actual $1,408 average monthly payout among today’s retirees). And, fewer than one in ten are able to identify all four factors that determine level of benefits: work history, birth year, marital status, and age at which a retiree begins receiving benefits.1

Taking Social Security before full retirement age can incur a significant financial penalty. In fact, nearly four out of ten (38%) Social Security recipients wish they had filed later, according to another recent national survey. In the simplest and most conservative cumulative calculation in this study, a married couple living into their early 90s could leave more than a half million dollars on the table by filing for Social Security retirement benefits at age 62 versus filing at age 70.2


Adding to the complication are myriad other factors that impact Social Security. For example, until you reach full retirement age, working while receiving early retirement benefits may reduce your Social Security retirement benefits. 

Those who take Social Security early often do so because of unexpected hardship, such as loss of a job (26%) or health issues (22%).1 And so, even if you expect to take Social Security at full retirement age, it may be prudent to prepare for scenarios where you are forced to receive reduced Social Security income.

Age to receive Full Social Security Benefits

Source: Social Security Administration

44% of pre-retirees say Social Security will be their main source of retirement income. But two-thirds (66%) worry that Social Security will run out of funding in their lifetime.1

Preparing for retirement holistically, considering multiple retirement income sources, can help pre-retirees and retirees maximize benefits and manage their income effectively during different stages of their retirement. Achieving clarity on how best to navigate the choices and trade-offs of Social Security can be one of the important first steps.

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1. The Nationwide Retirement Institute Consumer Social Security PR Study, March 2019

2. 2019 MassMutual Social Security Pulse Check

This publication is designed to provide general information and is for discussion purposes only. The effectiveness of any strategy is dependent upon each individual’s facts and circumstances. This article does not provide legal, tax or account advice. Because of the possibility of human or mechanical error, the accuracy, adequacy, completeness or availability of any information is not guaranteed.