Many Near-Retirees Will Take Social Security at Age 62
November 2, 2008
Nearly half of 61-year-old Americans intend to begin receiving Social Security benefits at age 62, the first year that eligible recipients can apply, according to a survey by Fidelity Investments.
The 45% of respondents who said they would take Social Security the next year cited immediate financial needs and health and longevity concerns as their primary reasons. About 77% of those said they needed the funds for basic living expenses, such as food, utilities and mortgages.
This group estimated that their Social Security payments will account for as much as half of their total retirement income, but only 22% knew exactly how much their check will be. About 73% of those intending to draw benefits at age 62 had no formal retirement income plan.
“Many Americans who are within one year of beginning to collect their Social Security retirement benefits may be planning to rely too much on it, considering Social Security currently only funds a little more than one-third, or 37%, of an average retiree’s income,” said Carolyn Clancy, executive vice president, Fidelity Investments Personal and Workplace Investing.
“Social Security-related decisions can be complex and there can be trade-offs associated with the various payment strategies,” she added. “But with some basic guidance and a lifetime retirement income plan, individuals may find it easier than they think to make an informed decision and get the most from their benefits.”
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