Many retirees, 40%, wish they had delayed filing for Social Security benefits, MassMutual learned in a survey.
Thirty percent filed at age 62 or younger. Of those who did, 53% said it was due to financial necessity, and 30% filed due to unforeseen issues, such as health issues or employment changes.
Nonetheless, 79% said they had the appropriate amount of information on when to file for Social Security benefits, and 58% did so without help or advice.
“When to retire and file for Social Security retirement benefits should be your choice, and this study underscores the need to plan ahead for the unforeseen and save as much as you can,” says Mike Fanning, head of MassMutual U.S. “Many are not saving enough for retirement and need to access funds the minute they can—regardless of the longer-term impact of the decision—and in some cases, unforeseen health issues are complicating the issue.”
MassMutual says a married couple that lives into their 90s but decide to begin their Social Security benefits at age 62 as opposed to age 70 could be leaving as much as half a million dollars on the table, or forfeiting $2,000 to $4,000 a month for life. Furthermore, a surviving spouse will receive $1,000 to $2,000 less a month if the couple filed at age 62.
Suzanne Shu, associate professor of marketing at the UCLA Anderson School of Management, recently noted that when people are told that retirees regret not taking Social Security benefits later, this influences them to delay their own benefits.“Each person needs to do a careful analysis based on their unique situation in life to help ensure they are not leaving money on the table for years to come, and a financial adviser can help,” says David Freitag, a financial planning consultant with MassMutual.
Age Friendly conducted the online survey of 618 individuals older than age 70 for MassMutual in March and April.