Social Security claiming decisions are very important to your clients and prospects, but a majority of future Social Security beneficiaries do not understand how claiming decisions impact their benefits. Results from a joint AARP and the FPA research survey, Social Security Planning in 2015 & Beyond: Perspectives of Future Beneficiaries and Financial Planners, show the importance future beneficiaries place on maximizing benefits and determining the best age to claim benefits.
“Future beneficiaries place the highest importance on maximizing the amount of money they (or they and their spouse) receive in retirement and in understanding the best age to claim benefits (96% very or somewhat important).” – Perspectives of Future Social Security Beneficiaries Ages 45-64: Detailed Findings
While Americans know they want to maximize their benefits, most lack an understanding of how to do so. Only 9% of the future beneficiaries felt they were very knowledge about how Social Security retirement benefits are determined, and based on the responses from financial planners in the survey, that percentage should be even lower. CFP® professionals felt only 1% of their clients were very knowledge about how Social Security retirement benefits are determined. A majority of those surveyed expect to start collecting benefits before reaching their full retirement age, failing to understand how delaying their claim until a later age would impact their retirement benefits.
The surveyed consumers reported financial advisors as the most useful information source, yet only 16% have sought help from a professional advisor. Social Security claiming decisions can have a large impact on plans for retirement; as a financial planner, your professional knowledge and financial planning software can guide your clients to informed Social Security claiming decisions. Exploring Social Security strategies in conjunction with your clients’ retirement projections, serves as a powerful platform for meaningful discussions and sound financial decisions.
Learn more about the surveys and related resources by visiting AARP’s research page: www.aarp.org/socialsecurityplanning.