Advisors today have been avoiding talking to their clients about social security. Social security has been getting very little thought in retirement planning, and this needs to change. A new study shows that pensioners and people approaching retirement have misconceptions about social security. The lack of information can in turn cost retirees in the long term. Unexpected taxes or less income for retirees is a possible scenario, in fact, it is already happening.
The older generation had pensions, but these are disappearing as David Giertz repeatedly reiterated. It is now more important to create a retirement income plan that includes maximizing on social security benefits. David Giertz is the president of distribution and sales at Nationwide Financial Distributors. The study showed that 30 percent of people already retired receive benefits that are less than they expected. When these numbers are compared to 2015 when that number was at 22 percent, it is an alarming trend.
In the study conducted by Nationwide Retirement Institute around 900 people aged 50 or older were surveyed. They were placed in three categories: future retirees, recent retirees, and ten years plus retirees. 86% of future retirees couldn’t accurately identify the factors that are used to determine the amount in social security benefits they receive. It is a widespread misconception that David is looking to change by encouraging advisers to talk to their clients about their social security. It also showed that most people nearing retirement would change advisors if they didn’t speak to them about social security.
The age at which an individual can start receiving Social Security is 62, and most people think because they can start taking it, they should. This David finds as something to avoid. It is something advisers call “land grab mentality. The government considers the full retirement age to be 66 and taking your social security at 62 could see you lose 25% of that amount.