Consumers lack knowledge about Social Security and inflation
Nationwide Retirement Institute® research shows economic concerns and lingering effects of the pandemic are driving anxiety about retirement planning
Inflation, the stock market and lingering effects of the pandemic have Americans worried about retirement. According to Nationwide Retirement Institute’s ninth annual Social Security Consumer Survey, 66% are worried about having enough income in retirement, a 10-percentage point jump in just a year, and more people say they’re planning to delay retirement to give them more time to save.
But their knowledge of a key building block of retirement planning – Social Security – remains woefully low. This year’s survey found that nine in 10 adults age 26 and over say they’re at least somewhat confident in knowing the facts about Social Security – but fewer than half who aren’t currently collecting Social Security know their full retirement age or how much to expect in monthly benefits. More than 60% also don’t know that Social Security is inflation-adjusted or how they can maximize their benefit.
Workers can do things today that can increase their Social Security knowledge just as they’re taking steps these days to offset inflation -- like dining out less (42% report this) and driving less (which 34% say they’re doing).
“It’s understandable that people are worried about retirement in the face of the current economic environment,” said Tina Ambrozy, senior vice president of Strategic Customer Solutions at Nationwide. “Individuals at all stages of their careers can benefit from educating themselves about the Social Security system and retirement planning and a trusted financial professional can help with that education.”
The good news: more young workers say they’re currently working with a financial professional or planning to in the future. Half of Millennials (age 26 to 41) say they now work with one, up from 42% in 2021. Many say they’d like to learn more about Social Security from a financial pro.
“There is an immediate opportunity for financial professionals to clear up clients’ misconceptions about Social Security to alleviate their fears and help them stay on track toward their long-term retirement goals,” Ambrozy said.
It’s clear many workers were expecting a quicker and more lasting “return to normal” following COVID disruptions that may have sidetracked their career plans and savings goals. Survey respondents are actually more concerned today about the pandemic’s impact on their retirement plans than they were last year: 20% of consumers say they’re pushing back their retirement start date due to COVID-19 this year, up from 15% in 2021. And nearly half (47%) are reevaluating their retirement plans to assess the financial impact of COVID-19, up from 38% a year ago.
“Every year we find that all generations need more Social Security education, but in this uncertain economic environment it’s more important than ever for people nearing retirement to understand that their Social Security benefits are protected against conditions such as inflation,” Ambrozy said.
To learn how to optimize Social Security benefits, visit www.Nationwide.com/SocialSecurity. Financial professionals can visit www.NationwideFinancial.com/SocialSecurity.