As an individual ages, it is only expected that they will come to rely on others for help doing everyday activities. In fact, across the nation there are 65.7 informal and family caregivers providing care to someone who is ill, disabled, or aged. But according to a new study, retirees are not given the proper care and advice when it comes to financial matters such as Social Security.
The study, conducted by Nationwide Retirement Institute, shows that a large majority of retired Americans have misunderstandings about Social Security in terms of income received or payable taxes.
In fact, the poll showed 30% of people already retired are receiving less of a benefit than originally expected. This has increased 8% since 2015.
But it is not just retirees who have misconceptions about Social Security. Approximately 900 people over the age of 50 were polled during this survey, and they were placed into three groups.
Of the future retirees — who plan on retiring within 10 years — 86% failed to accurately identify the numerous factors that go into determining one’s Social Security rate.
According to financial experts, one of the biggest misconceptions has to do with the age many retirees claim their benefits. Many retirees start claiming Social Security as soon as they turn 62 — the minimum age to receive benefits — without thinking of the financial repercussions that come with claiming early.
The problem is, if a retiree claims their benefits as soon as they can, it will result in lower monthly checks. Many retirees don’t understand this, or just choose not to ask questions.
Willie Schuette, an investment advisor with the JL Smith Group, tells CNBC, “Some [prospective clients] know there’s a reduction in benefits before their full retirement age, but they don’t understand exactly how much of a reduction it will be or that it’s permanent.”
In addition, health care costs have claimed a good chunk of many retiree’s Social Security benefits. A full 80% say these health expenses arrived earlier than previously expected.
Combined with the lower amount of benefits, these high expenses keep retirees from being able to live the retirement they anticipated.