Half Of Pre-Retirees Worried About Running Out Of Money, Plan To Retire Early Anyway

A new Schroders survey reveals a paradox among pre-retirees: while half are concerned about outliving their assets, 43% plan to claim Social Security before age 67, the full retirement age for those born in 1960 or later.

Only 10% of survey respondents plan to wait until 70 to maximize their monthly benefit, and the respondent who had not yet retired estimated needing $4,947 monthly for a comfortable retirement, according to thinkadvisor.

Despite 74% knowing that delaying Social Security increases payments, many plan early claims due to:

• Needing the money (39%)
• Concerns about Social Security’s future (38%)
• Wanting immediate access (36%)

Deb Boyden, head of U.S. defined contribution at Schroders, emphasizes that delaying benefits can significantly impact quality of life during retirement.

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The survey, conducted among 2,000 U.S. investors aged 28-79, also found that 88% are concerned about generating retirement income, 57% worry about losing regular paychecks and only 10% are confident they can replace 75% of their last paycheck in retirement.

Even worse, among retirees, 53% lack specific income generation strategies, simply withdrawing money as needed.

Boyden notes the challenging transition from accumulation to decumulation, suggesting that plan sponsors and asset managers collaborate on solutions bridging these phases.

The survey highlights a disconnect between retirement concerns and Social Security claiming strategies, underscoring the need for better education and planning tools to help pre-retirees optimize their retirement income, marking a huge opportunity for advisors.

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