Jenny Boudreau
Oct 19, 2021
According to a recent survey1, more than half of Americans express confidence that they know exactly how to optimize their Social Security benefits. However, only 6% actually understand all the factors that determine the maximum benefit someone can receive. In addition, the report highlighted additional knowledge gaps:
Respondents Worry About Social Security’s Future
The report suggests that one big reason that Americans may not be staying informed on the benefits of Social Security is that they have doubts that it will be around when they need it. Approximately 7 in 10 adults age 25+ (71%) worry about the Social Security program running out in their lifetime.
What might the future of Social Security look like? The 2020 Social Security trustees report2 estimated that the combined reserves of the various Social Security programs (retirement, survivor, and disability) would be depleted in 2035 unless changes are made. The Social Security Board of Trustees believes the most likely adjustments will come in the form of reduced benefits or an increase in taxes (or some combination of both). But it’s extremely unlikely that Social Security will go away.
The Opportunity for Plan Sponsors and Advisors
This might be a timely opportunity to help close the knowledge gap that many employees have regarding Social Security benefits. Plan sponsors should work with their advisor and plan recordkeeper to provide educational materials (or possibly provide employees with a quick education campaign) that cover the following:
Nationwide’s 8th Annual Social Security Consumer Survey can be found at https://tinyurl.com/yxjt8xwf.
1 Nationwide’s 8th Annual Social Security Consumer Survey, https://tinyurl.com/yxjt8xwf
2 At the time of the publication of this newsletter, the 2021 trustees report has not yet been released.
This information is not intended as authoritative guidance or tax or legal advice. You should consult with your attorney or tax advisor for guidance on your specific situation.
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