Consumer Social Security PR Study - … · Report Notes • “Current Retirees” includes both Recent and 10+ years Retirees • “Older adults”, “adults”, “retirees”

Consumer Social Security PR Study

February 2018Presented by The Harris Poll

NFM-17470AO

Target Group and Method

• This survey was conducted online from January 22 to February 5, 2018 to a targeted subset of the U.S. population: – 1,013 U.S. adults aged 50 or older, who currently collect or plan to collect Social

Security benefits and fall into one of the following groups:• 10+ (Years) Retirees (n=335),• Recent Retirees (n=339), or• Future Retirees (n=339)

• Research participants were drawn from the Harris Poll Online (HPOL) research panel.– Because the sample is based on those who were invited to participate in the HPOL

panel (and not random), we cannot calculate estimates of theoretical sampling error.– Sample of all U.S. respondents aged 50+ were weighted to the U.S. Population of

adults aged 50+ by age-gender, race/ethnicity, education, region, household income and retired status.

1

Report Notes

• “Current Retirees” includes both Recent and 10+ years Retirees• “Older adults”, “adults”, “retirees” include all qualified respondents• An asterisk (*) in a data chart indicates that a response is less than 1%• Significant differences among subgroups are noted at the 95% confidence level:

• Letters (A, B, C) = significant difference from comparison group• Some subgroups are too small to report quantitatively for PR. These are noted with

“caution”. This report notes when bases are small (<100), or very small (<30)• When subgroup sample sizes are too small to report quantitatively (<100), Total data is

noted. At times, Total may also be provided as additional information.• The Trended Data section highlights significant differences related to 2018, when

sample size is greater than 100

2

Base: Qualified Respondents (Total n=1,013): Future (n=339); Recent (n=339); 10+ (n=335)Q615 Do you currently receive or will you receive Social Security?Q702 IF Receiving SS (Total n=705; Recent n=284; 10+ n=331): At what age did you begin collecting Social Security?

IF Not Receiving SS (Total n=308; Future n=249): At what age do you think you will start to collect Social Security?

Future Retirees expect to collect SS around age 66, on average

3

• One in three Future Retirees (29%) are currently receiving SS. Expectedly, they are less likely to be receiving SS than both Recent Retirees (85%) and 10+ Retirees (100%).

• On average, Recent Retirees and 10+ Retirees say they began collecting SS at age 62 and 61, respectively.

Getting/Planning To Get SS

15%

85%

Currently Receiving Expect to Receive

Recent Retirees (B)

29%

71%

Future Retirees (A)

100%

10+ Retirees (C)

Collect Age:(Mean)

In 2018, the average age

that older adults expect

to begin receiving SS is higher than it was in 2017

(65.8 vs. 65.1).

(Expect to receive) (Began receiving) (Began receiving)

BCC

A AB

100%

10+ Retirees**

Over half of older adults do not plan to draw SS benefits before full retirement age

4Base: Plan To Draw Social Security (Total n=308); Future (n=249); Recent (n=55); 10+ (n=4)Q713 Do you plan to draw Social Security benefits before you reach full retirement age?

• Of Future Retirees who plan to draw SS, about a quarter (24%) plan to draw these benefits early, before reaching full retirement age, while about one in five (18%) are not sure if they will be drawing SS early.

Plan To Draw SS Benefits Before Full Retirement Age

24%

58%

18%

Future Retirees

49%

23%

28%

Recent Retirees*

Yes No Not Sure

*Caution, small base <100, results are directional in nature and stat testing is not shown**Caution, very small base <30, results are directional in nature and stat testing is not shown

Total:

Yes (27%)

No (53%)

Not sure (19%)

Three quarters of Recent and 10+ Retirees incorrectly identified the age at which they are eligible for full SS benefits

5Base: Qualified Respondents (Total n=1,013): Future (n=339); Recent (n=339); 10+ (n=335)Q7130. At what age are/were you eligible for full retirement benefits?

• Most commonly, older adults think they are eligible for benefits sooner than they actually are.

Age of Eligibility for Full Retirement Benefits

Added in 2018

33%

10%

57%

Future Retirees (A)

25%

10%65%

Recent Retirees (B)

22%

4%

74%

10+ Retirees (C)

Correctly Identified Age Eligible for Full SS BenefitsThinks They Are Eligible for Full SS Benefits Later than they Actually AreThinks They Are Eligible for Full SS Benefits Sooner than they Actually Are

C

A

Incorrect Response:

67% 75% 78%

C

C

A

23%

21%

20%

17%

15%

10%

9%

8%

7%

2%

2%

1%

22%

26%

23%

22%

11%

13%

13%

4%

7%

9%

1%

1%

4%

17%

About four in five current retirees would not change the age they started drawing SS

6

• Of those who would not change their drawing decision, about one in five cite having retired earlier than planned and/or heath problems as reasons they started drawing at that age.

3%

80%

16%

1%

5%

78%

13%

4%

Recent Retirees (B) 10+ Retirees (C)

Would you change the age you started to collect SS if you could?

In 2018, Recent Retirees are less likely than in 2016 and 2014 to say they would change

the age they started SS, and draw later if they could (13% in 2018 vs. 23% in 2016

and 2014).

Reasons For Drawing SS At That Age(Of those who would not change decision)

Retired earlier than planned

Health problems

Needed the money

Did not need the money earlierDid not think I would live long enough to make it worth

optimizing benefitsWanted the largest benefit possible

Lost job

Wanted to file before benefits are reduced

Did not believe Social Security would be aroundDid not know there were different filing options at different

agesCould not retire as early as planned

Wanted to wait until I was in a more favorable tax bracket

Other

Base: Currently Drawing Social Security (Total n=705): Recent (n=284); 10+ (n=331)Q712 Looking back on your decision to start at that age, would you changethat decision if you could?

draw later

Base: Would Not Change Drawing Decision (Total n=538): Recent (n=222); 10+ (n=254)Q710 Which of the following are reasons you drew Social Security at that age?Please select all that apply.

draw earlier

Widow benefits, wanted to start drawing at 62, could not find

employment, my daughter was still in high school and

she received a benefit

6% 7%

18%23%

65% 56%

10%10%

1% 4%


Much more than I expected

More than I expected

The same as I expected

Less than I expected

Much less than I expected

About a quarter of current retirees overestimate their SS payment

7Base: Currently Drawing Social Security (Total n=705): Recent (n=284); 10+ (n=331)Q724 Is your Social Security payment more, the same as or less than you expected?

• Over one in ten Recent Retirees (11%) and 10+ Retirees (13%) say their SS payment is less/much less than expected.

• About two thirds of Recent Retirees (65%) and three in five 10+ Retirees (56%) say their SS payment is what they expected.

Is your SS payment what you expected?

11% 13%

24% 30%

Much more/More than expected

Less/Much less than

expected

Vast majority of older adults expect to spend or are spending their SS on groceries

8

86%

64%

54%

40% 39%

18% 16% 15%10% 8%

3%

85%

58% 56%

36%30%

33%

26% 27%

13%

3% 1%

83%

53%57%

32%

25%29% 29%

24%

15%9%

1%

Groceries Healthcare Housing Entertainment Vacation Debt Savings Charity Helping familymembers

Investing Student loans

Future Retirees (A) Recent Retirees (B) 10+ Retirees (C)

Social Security used for Retirement Expenses

• Future Retirees are more likely than 10+ Retirees to say that they expect to spend or are spending their SS on healthcare (64% vs. 53%) and vacation (39% vs. 25%).

• Recent Retirees and 10+ Retirees are more likely than Future Retirees to say that they expect to spend or are spending their SS on debt, savings, and charity.

Base: Qualified Respondents (Total n=1,013): Future (n=339); Recent (n=339); 10+ (n=335)Q905. On which of the following expenses do you [expect to] spend your Social Security benefits in retirement?

C

C

A

A

AA A

A

B

In 2018, Future Retirees are less likely to say that they expect to spend their SS on housing (54% vs. 67% in 2017)

B

Note: Other not displayed

There are no significant differences in healthcare (or other) expenses compared to 2017 .

Retirees, on average, expect to spend about half of their total retirement income on groceries and housing in retirement

9

25%24%

17%

8% 8%

6%5%

2% 2%1% 1%

27%

24%

13%

6%5%

11%

7%

2%

*

3%

*

28%

24%

13%

4% 4%

8%9%

2%3%

2%

*

Groceries Housing Healthcare Vacation Entertainment Debt Savings Helping familymembers

Investing Charity Student loans


Mean % of Retirement Income Used for Expenses

• Healthcare follows next with Future Retirees spending more than their counterparts.

Base: Qualified Respondents (Total n=1,013): Future (n=339); Recent (n=339); 10+ (n=335)Q910. What percentage of your total retirement income do you [expect to] spend on each of the following in retirement?

BC

BC

C

A

BAB

Note: Other not displayed

There are no significant differences in healthcare (or other) expenses compared to 2017 .

Base: Qualified Respondents (Total n=1,013): Future (n=339); Recent (n=339); 10+ (n=335)Q720 What monthly payment are you currently receiving/expecting to receive from Social Security?Base: Not Getting SS and Provided Expected Monthly Dollar Amount (Total n=206); Future (n=172)Q722 Which one of the following best describes how you arrived at this dollar amount? Base: Getting SS (Total n=705); Recent (n=246); 10+ (n=331)Q1722 Which one of the following resources helped you to best identify the monthly Social Security payment amount you would receive prior to retiring?

36%

22%

19%

10%

5%

3%

0%

Used online Social Security calculator

I guessed

Contacted Social Security administration

Social Security/ SSA statement/ letter/ report

I calculated it based on how much I earned during myworking career or based on my most recent salary

Other

I don't know

16%

*

62%

3%

5%

0%

9%

9%

2%

66%

*

2%

*

16%

Expected SS payments higher, on average, than payments currently receiving

10

Social Security Payment Expecting/Receiving (Mean)

Future Retirees (A) $1,588Recent Retirees (B) $1,29110+ Retirees (C) $1,256

How did you arrive at that dollar amount?

Note: Only responses >3% among Total are displayed

In 2018, recent retiree’s average monthly payment they are receiving is lower than as

reported in 2017 ($1262 vs. $1487).

• Most commonly, Future Retirees (36%) used an online SS calculator to calculate their future payment.• Whereas the majority of Recent (62%) and 10+ Retirees (66%) contacted SS administration.

(Expecting) (Receiving)

BC

C

Base: Plan To Draw Benefits Early (Total n=81)Q714 You indicated that you plan to draw Social Security benefits before full retirement age. Which of the following are reasons you would start drawing Social Security benefits early? Please check all that apply.Base: Would Start Drawing Social Security Later (Total n=117)Q711 You indicated that you would start to draw Social Security later. Which of the following are reasons you would start drawing Social Security later? Please check all that apply.

Most who would draw SS later say it is so they can receive the largest benefit possible

11

• One in in five (20%) would start later because they didn’t need the money now.• Of those planning to start drawing early, about a third (31%) say they will do so because do not believe

SS will be around at their full retirement age.

58%

31%

26%

22%

22%

12%

7%

18%

Retire earlier than full retirement age

Do not believe Social Security will bearound at full retirement age

Expect benefits to be reduced before Ireach full retirement age

Do not think I will live long enough tomake it worth optimizing benefits

Expect to need the money earlier

Expect health problems before fullretirement age

Expect to lose my job

Other mentions

81%

20%

13%

10%

1%

13%

Wanted the largest benefit possible

Didn't need the money now

Did not think I would live long enough tomake it worth optimizing benefits

Wanted to wait until I was in a morefavorable tax bracket

Could not retire as early as planned

Other

Reasons Planning Start Drawing SS Early* Reasons Would Start Drawing SS Later

*Caution, small base <100, results are directional in nature and stat testing is not shown

Wanted to stay with my company for 50 years,

health problemsWhy wait, expect to live a long time, able to draw off

my retired husband

Total Current Retirees Recent* and 10+ Retirees*

To pay my living expenses

To supplement my income

I [will be retiring/ retired] earlier than expected

Laid off or unemployed

No other source of income

I have health issue

To start saving money sooner

Looking for work, or a better paying job

Other

Current Retirees drawing early need(ed) the money for living expenses or to supplement income

12

• 10+ Retirees most commonly attribute their need for SS money to supplementing their income (55%), while Recent Retirees cite needing the money to pay for their living expenses (61%).

Why did you need the SS money earlier?

61%

31%

22%

29%

29%

21%

9%

3%

1%

43%

55%

25%

18%

13%

11%

10%

5%

0%

52%

43%

23%

24%

22%

16%

9%

4%

1%

Base: Need The Money Earlier (Current Retirees n=121); Recent (n=64); 10+ (n=57)Q715A You indicated that you [would start/started] drawing Social Security benefits [early] because you [expect to need/needed] the money earlier. Why [do you think you will/did you] need the money earlier?

Recent Retirees10+ Retirees


Over half of older adults would not change their SS drawing decision

13

17%

61%

23%

Yes No Not sure

27%

50%

23%

10+ RetireesRecent Retirees

32%

46%

22%

Future Retirees**

• However, 17% of Recent and a quarter of 10+ (27%) Retirees would change their drawing decision.

Would Still Have Drawn SS Regardless of Life Event

Base: Would Not Change Drawing Decision Due to Any Life Event (Total n=241); Future (n=26); Recent (n=100); 10+ (n=115)Q715B You indicated that you started drawing Social Security benefits due to [a lost job/health problems/needing the money]. If it were not for [this reason/these reasons], would you still have started drawing Social Security benefits at this age?

Total:Yes (24%)No (54%)

Not sure (22%)

In 2018, those who would not change their drawing decision due to any life event are more likely than in 2016

to say they would not have drawn (54% vs. 40%).

**Caution, very small base <30, results are directional in nature and stat testing is not shown

Future Retirees most likely to indicate retirement and savings accounts, employment as additional sources of retirement income

14

70%

51%

36% 33% 31%

19%15%

9% 10%

41%37%

46%

27%

4%

15%

5% 6%

24%

43%38%

54%

29%

1%

30%

8% 8%

19%

Retirementaccounts (401k,

IRA, etc.)

Savingsaccounts

Pension Stocks, bonds,or mutual funds

Employment(full or part

time)

Annuities Inheritance Insurance None of these


Sources of Retirement IncomeIn 2018, Future Retirees

are less likely than in 2014 to say they will have

a pension(36% vs. 48%)

Avg. % of Expenses Expect SS to Cover:

• Future Retirees: 52%• Recent Retirees: 56%• 10+ Retirees: 54%

• 10+ Retirees most commonly cite a pension (54%) as an additional source of retirement income. • On average, Future (52%), Recent (56%) and 10+ (54%) Retirees expect SS to cover half or more of their

expenses.

Note: Only responses >3% among Total are reported

Base: Qualified Respondents (Total n=1,013): Future (n=339); Recent (n=339); 10+ (n=335)Q716 In addition to Social Security, [do you have/will you have] any of the following sources of retirement income? Please select all that apply.Q813 What percent of your expenses [do/do you expect] your Social Security benefits [to] cover?

A

BC

A

AB

A

BC

BC

B

Retirees say SS is/will be their primary source of retirement income

15

42%

14%

28%

4% 6%1% 1% 3% * 1%

50%

29%

10%2% * 3% 1% * *

4%

51%

25%

9%5%

0%4% 2% * 0%

4%

SocialSecurity

Pension Retirementaccounts

(401k, IRA,etc.)

Stocks,bonds, or

mutual funds

Employment(full or part

time)

Annuities Savingsaccounts

Inheritance Insurance Other


Primary Source of Retirement Income

• Future Retirees (28%) are more likely than Recent (10%) and 10+ (9%) Retirees to say that their primary source of retirement income will be retirement accounts.

Base: Has sources of retirement income in addition to SS(Total n=844); Future (n=303); Recent (n=269); 10+ (n=272)Q901 Which of the following [is/will be] your primary source of retirement income?

BC

CBC

AA

A A

16

Living Expenses in Retirement

22%

44%

34%

Future Retirees (A)

21%

46%

33%

Recent Retirees (B)

Increase Stay the same Decrease

30%

38%

33%

10+ Retirees (C)

Future Retirees are less likely in 2018 than in 2017 to say that they expect living expenses to increase in retirement (22% vs. 33%)

About two in five of each Retiree group expect their living expenses to remain the same • A third of each group expects their living expenses to decrease in retirement.

Base: Qualified Respondents (Total n=1,013): Future (n=339); Recent (n=339); 10+ (n=335)Q750 [Did your/Do you expect your] living expenses [to”] increase, decrease or stay the same in retirement?

Cost of living continues to be the top reason expenses increase in retirement

17Base: Respondents Whose Living Expenses Increased (Total n=248); Future (n=80); Recent (n=67); 10+ (n=101)Q755 [Why did your living expenses/do you expect your living expenses to] [“increase”]? That is, what do you believe that is due to?

80% 82%

43% 45%37%

28%

17%11%

3%

76%

63%

48%43%

51%

36%

11%6%

2%

87%

59% 61%

39% 40% 42%

9%

21%

9%

Cost of living Inflation My expenses My health I'm no longerworking

My income My physicalactivity level

My savings Change innumber ofhouseholdmembers

Future Retirees Recent Retirees 10+ Retirees

Reasons Living Expenses [Will Increase/Increased] in Retirement

• Most Future Retirees say their living expenses will increase in retirement because of inflation (82%).

Note: Only responses >3% among Total are displayed

81%Total: 69% 50% 42% 42% 35% 13% 13% 5%


**

70%

45%

22%18%

23%

12%8% 8% 7% 6%

58% 55%

22% 19%13% 13% 15%

6% 6% 7%

62%

51%

23% 20%

28%

10% 11% 11%

3% 4%

Expenses No longerworking

My income Cost of living Change innumber of HH

members

Physical activitylevel

Savings Health Paid offmortgage

Inflation

Future Retirees Recent Retirees (B) 10+ Retirees (C)

18Base: Respondents Whose Living Expenses Decreased (Total n=338); Future (n=120); Recent (n=116); 10+ (n=102)Q755 [Why did your living expenses/do you expect your living expenses to] [“decrease”]? That is, what do you believe that is due to?

• Over half of Recent (55%) and 10+ (51%) Retirees attribute no longer working to a decrease in living expenses in retirement.

Reasons Living Expenses [Will Decrease/Decreased] in Retirement

Most say decrease in living expenses is primarily due to overall expenses

(A)

64%Total: 50% 22% 19% 21% 12% 11% 8% 5%6%

Future Retirees least likely to say life in retirement will be/is better

19

[Is/Will] life in retirement [be] better or worse than before retirement?

21%

58%

21%

Future Retirees (A)

32%

40%

27%

Recent Retirees (B)

Better The same Worse

In 2018, Future Retirees are more likely than in 2016 to say life is

expected to be the same as it was before retirement (58% vs. 47%).

31%

44%

26%

10+ Retirees (C)

• Over a quarter of Recent (27%) and 10+ (26%) Retirees say life in retirement is worse than before retirement.

Base: Qualified Respondents (Total n=1,013): Future (n=339); Recent (n=339); 10+ (n=335)Q745 Is your life/Do you expect life in retirement [to be] better, the same or worse than before retirement?

BC

A A

75%

67%

67%

59%

47%

43%

32%

32%

8%

73%

85%

66%

67%

58%

57%

38%

43%

3%

My income

Cost of living

My expenses

My health

I'm no longer working

Inflation

My savings

My physical activity level

Change in number of household members

Worse: Retiree Major Mentions (n=185)Recent Retirees (n=97)*, 10+ Retirees (n=88)*

20

Retirees: Why is life better/worse?

82%

45%

37%

33%

31%

27%

16%

5%

3%

87%

45%

34%

38%

29%

33%

10%

25%

1%

I'm no longer working

My expenses

My health

My savings

My physical activity level

My income

Cost of living

Change in number of household members

Free to do what I would like

Better: Retiree Major Mentions (n=224)Recent Retirees (n=117), 10+ Retirees (n=107)


Both Recent and 10+ Retirees cite no longer working as the top reason why life is better in retirement• Recent Retirees (75%) cite income, while 10+ Retirees (85%) cite cost of living as the top reason why life

is worse in retirement.

Base: Retired Respondents Q746 Why do you believe your life is [“better” OR “the same” OR “worse”]? That is, what do you believe that is due to?

Note: Only responses >3% among Total are displayed*Caution, small base <100, results are directional in nature and stat testing is not shown

B

A third of Recent and 10+ Retirees say health problems are interfering with their retirement

21

• However, about three in five Recent (59%) and 10+ (69%) Retirees were able to do the things they wanted when they retired.

Able to do things wanted in retirement?

59%

41%

Recent Retirees (B)

69%

31%

10+ Retirees (C)

Health problems interfering with retirement?

35%

65%

Recent Retirees (B)

37%

63%

10+ Retirees (C)

Yes

No

Current Retirees: 36% Yes

Compared to 2017, Current Retirees are less likely to say they are able to do the things

they wanted to do in retirement (64% vs. 74% in 2017).


Reasons Not Able to do Things Wanted *:• Couldn’t afford to do those things: 85%• Had to take care of loved ones: 19%• Had to continue working: 4%• Poor Health: 1%• Other: 9%

Base: Retired Respondents (Total n=674); Recent (n=339); 10+ (n=335)Q760 Were you able to do the things you wanted when you retired?

Base: Retired Respondents (Total n=674); Recent (n=339); 10+ (n=335) Q765 Do health problems keep you from living the retirement you expected?

Base: Did Not Do The Things Wanted To After Retirement, Not Health Related (Total n=73)Q785 Why were you not able to do the things you thought you would when you retired?

There are no significant differences between Retiree Groups .

*Caution, small base <100, results are directional in nature

Health problems occurred much sooner than expected for many retirees

22Base: Had Health Problems (Total n=245); Recent (n=116); 10+ (n=129)Q770 Did those problems occur earlier in your retirement than you expected?

Were health problems sooner than expected?

90%

10%

Recent Retirees (B)

70%

30%

10+ Retirees (C)

Yes

No

How much earlier?

9%

31%60%

Recent Retirees (B)

6%

26%

68%

10+ Retirees

A year sooner than I expected

More than 1 year but less than 5 years

More than 5 years sooner

Yes


Up significantly since 2014 (80% vs. 68%).

• Eight in ten 10+ Retirees (80%) say health problems that occurred sooner than expected, with 63% saying they occurred more than 5 years sooner than they expected.

Base: Health Problems Occurred Earlier Than Expected (Total n=192); Recent (n=100); 10+ (n=92)Q775 How much earlier did health problems occur?

CurrentRetirees:

(8%)(29%)(63%)


*

Health care expenses keep about a quarter of Current Retirees from living the retirement they expected

23

Health Care Expenses Interfere With Retirement Life Expected?

25%

75%

Recent Retirees (B)

21%

79%

10+ Retirees (C)

Yes

No


Results are consistent with previous years.

Base: Retired Respondents (Total n=674); Recent (n=339); 10+ (n=335)Q780 Do health care expenses keep you from living the retirement you expected?

• Most Recent (75%) and 10+ (79%) Retirees say that health care expenses do not interfere with retirement life as expected.

24

52%

29%

11% 9%5% 5%

25%

16%

55%

29%

5% 6% 3% 2%

14%

24%

66%

41%

11%7%

3% 1%9%

13%

Medicare Part BPremiums

Medicare Part D Employmenttaxes

Medical / Dentalexpenses

Child Support Alimony I don't know Nothing iswithheld from

Social Securitypayments


Perceived SS WithholdingsFuture Retirees are more likely in 2018 than in 2014 to

say that Medicare Part B might be withheld from SS payments (52% vs. 40%).

A quarter of Future Retirees admit to not knowing expenses might be withheld from SS • Two in five Future Retirees (41%) say that they don’t know what can be withheld or, incorrectly indicate

that nothing can be withheld from SS payments.

41% Future Retirees

Base: Qualified Respondents (Total n=1,013): Future (n=339); Recent (n=339); 10+ (n=335)Q718 Which of the following types of expenses might be withheld from Social Security payments?

B BC

BC

AB

Recent Retirees are more likely in 2018 than in 2015 to say that nothing is withheld from SS payments (24% vs. 11%).

Recent Retirees are more likely in 2018 than in 2014 to say that they don’t know (14% vs. 6%).

AB

C

Less than 1% of older adults accurately identified all the

expenses that might be withheld from Social Security payments: Medicare Part B Premiums, Medicare Part D, child support, and alimony

Not withheld

86%

81%

81%

79%

71%

64%

88%

87%

81%

83%

70%

75%

• 10+ Retirees are most likely group to know that Social Security benefits are not tax-free, while future retirees are least likely to know that if someone is enrolled in SS and Medicare, a portion of their Medicare expenses are deducted directly from their SS checks.

25


Basic Social Security facts understood by most older adults

Correct Responses

Base: Qualified Respondents (Total n=1,013): Future (n=339); Recent (n=339); 10+ (n=335)Q735 Do you believe the following statements to be true or false?

Social Security offers widow and widower benefits* (T)

Social Security may offer benefits for your spouse or children (T)

If you continue to work after your full retirement age, you will not receive Social Security retirement benefits (F)

If someone is enrolled in Social Security and Medicare, a portion of their Medicare expenses are deducted directly

from their Social Security checks* (T)

If a person is divorced, he or she may be eligible for Social Security benefits based on the ex-spouse's record (T)

Social Security benefits are tax-free^ (F)

89%

83%

81%

66%

65%

58%

A

AB

A

*Added in 2018^Updated in 2018

• The vast majority of older adults do not realize that children under 18 are not eligible for Social Security benefits on their parent’s records.

26


However, some Social Security facts still cause some confusion

Correct Responses

Base: Qualified Respondents (Total n=1,013): Future (n=339); Recent (n=339); 10+ (n=335)Q735 Do you believe the following statements to be true or false?

/ arrows = significantly higher/lower than 2017 @ 95%

Social Security offers guaranteed income for life (T)

After your full retirement age, there is no limit on what you can earn by working (T)

Your income level does not impact the amount you are charged for Medicare premiums* (F)

Social Security is not protected against inflation (F)

The new 2018 tax laws make changes to Social Security (F)

Children under 18 are eligible for Social Security benefits on their parent's records (F)

48%

49%

42%

40%

23%

14%

(55%)

B

*Added in 2018

55%

42%

45%

40%

20%

8%

58%

39%

46%

41%

22%

13%

Older adults underestimate how long the average 65 year old will live

27

Average Age Average 65 Year Old Will Live To

• On average, older adults think women will live to be 83.6, when in actuality they will live to be 86.6 years old.

Base: Qualified Respondents ̂ (Total n=507): Future (n=170); Recent (n=169); 10+ (n=168)Q7350A. To what age do you think the average 65 year old man will live?

A A

Added in 2018

81.781.3 81.2

84.383.6 83.8 83.5

86.6

80.0

81.0

82.0

83.0

84.0

85.0

86.0

87.0


Men Actual Men* Women Actual Women*

*Source: SSA Life Expectancy Calculator: https://www.ssa.gov/planners/lifeexpectancy.html Base: Qualified Respondents ̂ (Total n=506): Future (n=169); Recent (n=170); 10+ (n=167)Q7350B. To what age do you think the average 65 year old woman will live?

^Respondents were randomly spilt between these two questions.

28

Strongly/Somewhat Agree

I worry about the Social Security program running out of funding in my lifetime

I know exactly how to maximize my Social Security benefits

Social Security on its own should be enough to help me live comfortably in retirement

There is not much difference in benefits whether you take Social Security early or not

I am planning to divorce after I retire

I became divorced after I retired

72%

47%

26%

13%

4%

58%

52%

19%

18%

2%

3%

53%

56%

27%

24%

1%

15%

Base: Married or Separated Total (n=617); Future (n=221); Recent (n=201); 10+ (n=195)

Base: Divorced and Retired Total (n=98)*; Recent (n=50); 10+ (n=48)

Future Retirees are most likely group to worry about SS program running out of funding in their lifetime• Less than half of Future Retirees (47%) say they know exactly how to maximize their SS benefits.

NA

Base: Qualified Respondents (Total n=1,013): Future (n=339); Recent (n=339); 10+ (n=335)Q740 How much do you agree or disagree with the following statements?


BC


(12%)


A

8% of all retirees say

they became divorced after they retired

29

The Social Security system is in need of change

Older adults agree that the Social Security system is in need of change• Most commonly, Future (69%), Recent (61%), and 10+ (58%) Retirees who agree the SS system is in

need of change feel that it needs increased funding.

Base: Qualified Respondents (Total n=1,013): Future (n=339); Recent (n=339); 10+ (n=335)Q740 How much do you agree or disagree with the following statements?

Future Retirees (A)Recent Retirees (B)10+ Retirees (C)

Increased funding

Less taxation of benefits

Increased reimbursement amounts

Increased full retirement age

Reduced age of eligibility

Use of import taxes for funding

Other

69%

48%

32%

19%

20%

15%

13%

61%

53%

38%

22%

13%

11%

18%

58%

48%

28%

22%

9%

11%

23%

Changes needed to Social Security system

C

A

5% 5% 4%

16% 20%11%

51% 50%48%

28% 25%36%

FutureRetirees (A)

RecentRetirees (B)

10+Retirees (C)

Strongly disagree Somewhat disagreeSomewhat agree Strongly agree

79%Agree

75%85%

Base: Agrees SS System Needs Change (Total n=803); Future (n=276); Recent (n=258); 10+ (n=269)Q915 You indicated that the Social Security system is in need of change. In which of the following ways do you think the Social Security system needs change?


(74%)

(27%)

(34%)

(62%)

(51%)

(56%)

(4%)

(xx%) without arrows indicate larger, but non-significant differences from 2017

30

There will be cuts to Social Security under the current presidential administration

About three in five older adults are concerned about cuts to SS under the current administration• About half of Future (55%), Recent (49%), and 10+ (45%) Retirees agree that there will be cuts to Social

Security under the current presidential administration.

Base: Qualified Respondents (Total n=1,013): Future (n=339); Recent (n=339); 10+ (n=335)Q740 How much do you agree or disagree with the following statements?Q920 How concerned are you about Social Security benefits getting cut by the current presidential administration?

Concerned about cuts to SS under current

presidential administration

16% 20% 19%

28%31% 36%

39%34%

27%

17% 15% 18%

FutureRetirees (A)

RecentRetirees (B)

10+Retirees (C)

Strongly disagree Somewhat disagreeSomewhat agree Strongly agree

55%Agree

49% 45%

15% 20% 17%

21%21% 22%

31% 28%31%

33% 32% 30%

FutureRetirees (A)

RecentRetirees (B)

10+Retirees (C)

Not at all concerned Not very concernedSomewhat concerned Very concerned

64%Concerned 60% 61%

C

C


(25%)

(56%)

(xx%) without arrows indicate larger, but non-significant differences from 2017

31

Who should be responsible for funding Social Security?

Older Adults feel responsibility for funding Social Security should be shared• About three in four Future (74%) and 10+ (73%) Retirees feel that Social Security should be funded by

employers.

Base: Qualified Respondents (Total n=1,013): Future (n=339); Recent (n=339); 10+ (n=335)Q925 Who should be responsible for funding Social Security? Please select all that apply.

74%69%

64%

3%

68% 71%64%

3%

73% 74%66%

5%

Employers Employees Federal Government Other


Future Retirees are more likely in 2018 than in 2017 to say employers (74% vs. 64%).

• About one in seven incorrectly believe that life expectancy determines the maximum Social Security benefit.

32

74%

62%

20%

15%

2%

17%

67%

57%

17%

12%

1%

23%

64%

55%

17%

16%

1%

22%

Age

Benefit start date

Marital status

Life expectancy (false)

Family medical history (false)

All of the above (false)


What Determines The Maximum Social Security Benefit?

Compared to 2016, 2015 and 2014, Older Adults in 2018 are more likely to incorrectly believe that life

expectancy determines the maximum social security an individual can receive (14% vs. 7%, 8%, 8%)

Half or more older adults believe that age or benefit start date determines SS benefits

Base: Qualified Respondents (Total n=1,013): Future (n=339); Recent (n=339); 10+ (n=335)Q742 What factors determine the maximum Social Security benefit an individual can receive?

C

Only 12% of Future and Recent, and 11% of 10+ Retirees

accurately identified all three factors that determine the maximum SS benefit an individual can receive.

33

9%13% 11% 9%

3% 4% 2% 2%

48%

11% 8% 8% 8%4% 1% 2% 2%

57%

10% 9% 10% 10%5% 3% 1% 4%

49%

1-2% 3-4% 5-6% 7-10% 11-15% 16-20% 21-25% More than25%

Not sure/Don'tknow


Percentage of Tax Increase on Income of Private Employees that Will Keep Social Security Fully Funded for 75 Years

About half of Older Adults are not sure, or don’t know the percentage of tax increase that would fully fund SS for 75 years • Further, two in five Future (43%) and 10+ (41%) and a third of Recent (33%) Retirees incorrectly identify

the percentage of tax increase that would keep SS fully funded for 75 years.

Incorrect: 43% Future, 33% Recent, 10+ 41%

Base: Qualified Respondents (Total n=1,013): Future (n=339); Recent (n=339); 10+ (n=335)Q9250. What percentage of tax increase on income of private employees do you think would keep Social Security fully funded for the next 75 years?

Added in 2018

27%

3%70%

10+ Retirees (C)

• Overall, just over one in ten older adults (13%) say their financial advisor has provided advice on how to handle Social Security. Of those working with a financial advisor, over four in ten retirees say the same.

27%

2%71%

Recent Retirees (B)

49%51%

Future Retirees (A)

Almost three in ten older adults currently work with a financial advisor

34Base: Qualified Respondents (Total n=1,013): Future (n=339); Recent (n=339); 10+ (n=335)Q800 Do you currently work with a professional financial advisor?

Works with a Financial Advisor

27%

5%68%

Future Retirees (A)

Yes, one Yes, more than one No

FA Provided Advice on SS?

Total Incidence of having a FA who provided SS advice: 13%

35%

65%

Recent Retirees (B)

36%

64%

10+ Retirees (C)

Base: Working With A Financial Advisor (Total n=325); Future (n=124); Recent (n=101); 10+ (n=100)Q802 Has your financial advisor provided advice on how to handle Social Security?

Total:Yes (42%), No (58%)

Yes No

Total:Yes, one (27%), Yes, more than one (3%) No (69%)

35Base: Have Gotten Advice On Social Security (Total n=137); Future (n=61); Recent (n=41); 10+ (n=35)Q806 In discussions with your financial advisor, who initiated conversations about Social Security? Q1717 At what point after you started working with your financial advisor did the Social Security conversation happen?

Who initiated the FA SS discussion?How soon did the SS discussion happen once

you started working with an advisor?

61%

25%

14%

49%

32%

19%

42%

48%

10%


13%

38%

48%43%

27% 30%23%

63%

15%

Immediately Shortly afterwards After a while


• Most commonly Future Retirees (48%) say that they had the discussion a while after they started working with a financial advisor, while Recent Retirees (43%) say they had the discussion immediately, and 10+ Retirees (63%) say they had the discussion a shortly after they started working with their financial advisor.

Of those given SS advice by a FA, about two in five initiated the discussion themselves

*Caution, small base <100

Total:

23% 41% 36%

Me

Financial Advisor

My spouse, partner or family member

54%

32%

14%

Total:

* * ** * * **


2% 4%23%

1%

51%

68% 73%

24% 27% 27%

FutureRetirees

RecentRetirees

10+Retirees

Yes, completely

Yes, mostly

Not yet, but will

No

15%

13%

8%

8%

7%

2%

64%

Retired earlier than planned

Needed the money now

Lost job

Could not retire as early as planned

Did not think I would live long enough tomake it worth optimizing benefits

Did not believe Social Security would bearound

Other

Majority of older adults have followed their FA's SS advice

36

Did you follow the FA’s SS advice?*

75% Yes

Base: Have Gotten Advice On Social Security (Total n=137); Future (n=61); Recent (n=41); 10+ (n=35)Q808 Have you followed the advice given to you by your financial advisor regarding Social Security benefits?

100%

Why didn’t you follow the FA’s SS advice?**

95%

Base: Did Not Follow The FA Advice Regarding SS Benefits (Total n=19)Q809 You indicated that you have not followed the advice given to you by your financial advisor. Which of the following are reasons you have not followed that advice? Please check all that apply.

• About a quarter say they followed the advice of their FA “completely.”

Total:Yes, completely (26%)

Yes, mostly (60%)Not yet, but will (12%)

No (2%)


***

Majority of older adults working with an FA and who have not been advised on SS do not expect this advice from their FA

37

29%

71%

Yes No

2018 FA Social Security advice expectations are on par with previous years.

• Less than one third with an FA who have not been advised on SS (29%) say SS advice is something they expect from their FA.

Base: Work With FA And Have Not Been Advised On Social Security (Total n=188)Q804 Is Social Security advice something you expect from your financial advisor?

Expect Social Security Advice From FA

1%10% 17%

26%

29%

37%

49%40%

33%

23% 21% 13%

FutureRetirees (A)

RecentRetirees (B)

10+Retirees (C)

Extremely likely Somewhat likelyNot very likely Not at all likely

Three quarters of Future Retirees who work with a FA likely to switch FAs to maximize SS benefits

38Base: Don’t Work With a FA (Total n=688); Future (n=215); Recent (n=238); 10+ (n=235)Q810 Do you plan on asking a financial advisor specifically about Social Security benefits in the next 6 months?

(Work with or plan to work with FA)Likelihood of Switching FA to Maximize

SS Benefits

72%Extremely/Somewhat

likely

61%46%

• A strong majority of those who do not work with a FA don’t plan to ask about SS in the next six months.

Base: Work With a FA OR Plan To (Total n=340); Future (n=132); Recent (n=104); 10+ (n=104)Q812 If a financial advisor could not show you how to maximize your Social Security benefits, how likely would you be to find an advisor who could?

Total:62%

Extremely/Somewhat likely 1%

93%

6%

10+ Retirees (C)

1%

81%

17%

Recent Retirees (B)

Yes No Not sure

(Do not work with a FA)Plan on asking FA about SS in next 6 months?

2%

71%

27%

Future Retirees (A)

Similar to 2015 and 2017 , Future Retirees in 2018 are less likely than those in 2016 to say

they plan on asking a FA specifically about SS benefits in the next 6 months (2018: 2%, 2017:

2% and 2015: 3% vs. 2016 10%).

C C

AC

C

B

AA

Around half those working with a FA feel it is extremely/very important to be updated on legislative changes that may affect retirement

39

6% 9% 9%

38% 35%44%

37% 37%29%

20% 19% 19%

FutureRetirees (A)

RecentRetirees (B)

10+Retirees (C)

Extremely important Very important Somewhat important Not at all important

(Work with FA)Importance of Update By FA About Legislative

Changes That May Affect Retirement

57%Extremely/

Veryimportant

56% 47%

• Almost three in five Future Retirees (57%) say that is extremely or very important that their financial advisor update them about legislative changes that may affect their retirement.

Base: Work With a FA (Total n=325); Future (n=124); Recent (n=101); 10+ (n=100)Q811 How important to you is being updated by your financial advisor about legislative changes that may affect your retirement?

Total: Extremely/Very Important

(54%)Not at All/Somewhat

Important (46%)

78%

79%

76%

73%

65%

94%

94%

95%

93%

72%

98%

92%

95%

94%

73%

Majority of married older adults know spouse’s retirement plans

40Base: Qualified Married Respondents (Total n=601); Future (n=214); Recent (n=195); 10+ (n=192)Q8014. How much do you agree or disagree with the following statements?

My spouse knows when I will begin collecting Social Security

I know at what age my spouse will retire

My spouse knows at what age I will retire

I know when my spouse will begin collecting Social Security

My spouse and I are coordinating when and how we file for Social Security, to maximize our benefits


Strongly/Somewhat Agree

• Current Retirees are more likely than Future Retirees to be knowledgeable.

A

A

A

A

A

A

A

A

Added in 2018

Familiarity with the restricted filing strategy is low

41

47% 58% 64%

27%22%

24%19%

16%9%8% 4% 3%

FutureRetirees (A)

RecentRetirees (B)

10+Retirees (C)

Very familiar Somewhat familiar Not very familiar Never heard of it

Familiarity with Restricted Filing

27%Very/Somewhat

Familiar

19% 13%

• Two-thirds of 10+ Retirees (64%) have never heard of restricted filing in order to collect spousal benefits while allowing your own benefit to grow.

Base: Qualified Respondents (Total n=1013); Future (n=339); Recent (n=339); 10+ (n=335)Q7400. How familiar are you with the strategy of restricted filing in order to collect spousal benefits while allowing your own benefits to grow?

Total: Very/Somewhat Familiar (21%)

C

C

A A

Added in 2018

Few adults (born in 1953 or earlier) who are familiar with restricted filing have had discussion with a FA about it

42

Discussion with a Professional Financial Advisor about Restricted Filing

• Only one in ten Current Retirees born in 1953 or earlier have had these discussions.

Base: At Least Somewhat Familiar with Restricted Filing and born in 1953 or Earlier (Total n=144); Future (n=44*); Recent (n=44*); 10+ (n=56*)Q7405. Have you talked to a professional financial advisor about restricted filing?

A A

Added in 2018

13% yes

87% no

Total Retirees

10% yes

90% no

Among those born in 1953 or earlier

Few older adults have formal written retirement plans

43

Formal Written Retirement Plans

• Less than one in five Future (18%), Recent (13%), and 10+ (14%) Retirees have a formal written retirement plan.

Base: Qualified Respondents (Total n=1013); Future (n=339); Recent (n=339); 10+ (n=335)Q7410. Do you have a formal written retirement plan?

Total: Yes (15%)

A A

Added in 2018


18% Yes 14% Yes13% Yes

44

6%

14%

32%30%

18%

7%

14%

27%29%

22%

5%

22%24% 25% 25%

Within the next 6 months 6-12 months from now 1-2 years from now 3-5 years from now 6 or more years from now


Timing of the Next Recession

A majority of older adults think the next recession will hit the U.S. within the next 5 years• 10+ Retirees are more likely than Future Retirees to feel that the next recession will hit the U.S. 6-12

months from now.

Base: Qualified Respondents (Total n=1,013): Future (n=339); Recent (n=339); 10+ (n=335)Q900. When do you think the next recession will hit the U.S.?

A

Added in 2018

Total:Within the next 2 years (51%)

Within the next 5 years (79%)

45

Confidence in Investment Portfolio Surviving a Market Downturn

Future Retirees most confident in their investment portfolio surviving a market downturn • Two in five Recent (40%) and 10+ (41%) Retirees say they do not have an investment portfolio.

Base: Qualified Respondents (Total n=1,013): Future (n=339); Recent (n=339); 10+ (n=335)Q930. How confident are you that your investment portfolio will survive a market downturn?

Added in 2018

18%

40% 41%5%

4% 4%

15%

10% 7%

47%33%

29%

15% 14% 20%

FutureRetirees (A)

RecentRetirees (B)

10+Retirees (C)

Very confidentConfidentSomewhat confidentNot at all confidentI do not have an investment portfolio

62%Very

confident/ Confident

20%Somewhat/

Not at all confident

47%

14% 11%

48%

BC

BC

C

A A

46

Confidence in Investing Outside U.S. Borders

Future Retirees the most confident in investing outside U.S. Borders • However, very few Future (5%), Recent (5%), or 10+ (3%) Retirees are very confident in investing

outside U.S. borders.

Base: Qualified Respondents (Total n=1,013): Future (n=339); Recent (n=339); 10+ (n=335)Q935. How comfortable are you investing outside of U.S. borders (i.e., in international stocks/mutual funds, etc.)?

Added in 2018

38%49% 53%

26%

27% 23%

30%19% 22%

5% 5% 3%

FutureRetirees (A)

RecentRetirees (B)

10+Retirees (C)

Very confident

Confident

Somewhat confident

Not at all confident

35%Very

confident/ Confident

65%Not very/Not at all

confident

24%

76% 75%

25%BCB

A

AA

A

47

Greatest Challenge to Meeting Investment Goals in the Next 5 Years

Future Retirees see market recession as greatest challenge to meeting investment goals while others cite US political climate• However, about a third of Recent (31%) and 10+ (34%) Retirees don’t see any challenges to meeting

their investment goals

Base: Qualified Respondents (Total n=1,013): Future (n=339); Recent (n=339); 10+ (n=335)Q940. Over the next five years, which of the following do you see as the greatest challenge to meeting your investment goals?

Added in 2018

AA

34%

6%

6%

7%

12%

23%

12%

31%

5%

4%

8%

13%

25%

14%

16%

4%

8%

10%

16%

21%

25%

I don't see any challenges to meetingmy investment goals

Other, please specify

Tax reform

Geopolitical events

Inflation

U.S. political climate

Market recession


BC

AA

In 2018, Future Retirees are less likely than in

2014 to say they will have a pension

(36% vs. 48%) Sees challenges to

meeting investment goals (NET):

Future Retirees – 84% Recent Retirees – 69%

10+ Retirees – 66%

Disclaimers

This material is not a recommendation to buy, sell, hold, or rollover any asset, adopt an investment strategy, retain a specific investment manager or use a particular account type. It does not take into account the specific investment objectives, tax and financial condition or particular needs of any specific person. Investors should work with their financial professional to discuss their specific situation.

This information is general in nature and is not intended to be tax, legal, accounting or other professional advice. The information provided is based on current laws, which are subject to change at any time and has not been endorsed by any government agency.

Nationwide Investment Services Corporation (NISC), member FINRA, Columbus, OH. Nationwide Retirement Institute is a division of NISC.

Nationwide, the Nationwide N and Eagle, Nationwide is on your side and Nationwide Retirement Institute are service marks of Nationwide Mutual Insurance Company. © 2018 Nationwide

48

Documents

Consumer Social Security PR Study - … · Report Notes • “Current Retirees” includes both Recent and 10+ years Retirees • “Older adults”, “adults”, “retirees”