Just 10% of Non-Retired Americans Will Wait Until 70 to Take Maximum Social Security Benefits

44% Fear Social Security Will Run Out

The cost of a comfortable retirement? $4,940 per month

Vast majority with DC plan want in-plan retirement income solutions

NEW YORK--()--According to the 2023 Schroders US Retirement Survey, only 10% of non-retired Americans say they will wait until 70 to receive their maximum Social Security benefit payments.

This includes 17% of non-retired respondents on the verge of retirement (ages 60-65).

Overall, 40% of non-retired respondents plan to take their Social Security benefits between 62-65, leaving them short of qualifying for their full retirement benefits.

The choice to forgo larger Social Security payments is a deliberate one, as 72% of non-retired investors – and 95% of non-retired ages 60-65 – are aware that waiting longer earns higher payments.

Why are so many non-retired Americans taking their Social Security benefits before age 70?

  • 44% said they were concerned Social Security may run out of money/stop making payments
  • 36% said they will need the money
  • 34% said it was their money and they wanted access to it as soon as possible
  • 13% said they were advised to take it earlier than age 70

“We have a crisis of confidence in the Social Security system and it’s costing American workers real money,” said Deb Boyden, Head of US Defined Contribution at Schroders. “Fear about the stability of Social Security has people walking away from money that could improve their quality of life in retirement. Many are not even waiting for their full benefit let alone the maximum, which means they will have to create more income on their own, making it even more important to save and invest earlier for retirement.”

Average Monthly Income: Having a Plan Pays for Retirees

When asked to forecast how much monthly income they will need to enjoy a comfortable retirement, non-retired survey participants said $4940, on average.

This includes non-retired millennials, who said $5135 per month; and those who are nearing retirement (ages 60-65) who said $4855 per month.

Retirees said that including Social Security, their total monthly income is $4170 on average, though 37% said their monthly income is less than $2500.

Having an advisor and a plan pays off: the average monthly income including Social Security for retirees with a financial advisor is $5075.

For retirees with a formal financial plan, their monthly income is $5810 on average, which is almost twice the $3000 per month of income reported by those without a financial plan.

Defined Contribution Plan Income Solution Seen as Valuable and In Demand

Among working Americans participating in a workplace retirement plan, 32% said their plan provided a retirement income solution; 39% said they didn’t know; and 29% said no.

The vast majority (82%) of those who are offered an income solution in their plan are likely to use it.

Among those who don’t know or do not have a retirement income solution in their plan, 55% said they wish they did – including 64% of those nearing retirement (ages 60-65) – while 33% were unsure, and 12% said it wasn’t necessary.

“Americans are increasingly looking to their employers for insights and solutions to their retirement income challenges,” Ms. Boyden said. “While this has been a topic of conversation for some time, we believe we are entering a phase of accelerated adoption among plan sponsors for solutions to meet these challenges, with products that provide lifetime income, while addressing sequence of return risk with principal protection, and giving investors the flexibility to take the income when they want or need it.”

No More Paycheck Is Terrifying; Income Replacement Is Low

The idea of no more regular paychecks in retirement is not only concerning to 57% of non-retired American, but terrifying for another 23%.

They also have low final paycheck income replacement expectations: Only 23% believe they will need to replace 75% or more of their final paycheck with other sources of income in retirement. Thirty-two percent said between 50-74%; 23% said they needed to replace less than 50%; and 22% had no idea.

For retirees, the majority (51%) are able to replace less than 50% of their last paycheck; 26% are able to replace 50-74%; and 24% can replace 75% or more.

How will non-retired Americans generate income in retirement? Aside from Social Security, they expect to also use:

  • Cash savings (58%)
  • Workplace retirement plan (53%)
  • Investment income outside of employer provided retirement plan (40%)
  • Defined benefit/pension plan (20%)
  • Rental income (14%)
  • Annuities (10%)
  • Cash value of life insurance (10%)
  • Reverse mortgage (4%)

Retirees use a variety of specific strategies to turn their savings into income including:

  • Systematic withdrawals from retirement accounts (33%)
  • Dividend producing stocks or mutual funds (24%)
  • Annuities (13%)
  • Individual bonds or bond mutual funds (12%)
  • CDs (12%)

However, almost half (49%) said they don’t have any retirement income strategies, they just take money when they need it.

About the Survey

The Schroders 2023 US Retirement Survey was conducted by 8 Acre Perspective among 2,000 US investors nationwide ages 27-79, including respondents between ages 27-44 for the first time. The survey was conducted from February 13 to March 3 in 2023. The median household income for working Americans surveyed was $75,000.

Schroders plc

Founded in 1804, Schroders is a global investment management firm with £726.1 billion (€846.1 billion; $923.1 billion) assets under management, as at 30 June 2023. Schroders continues to deliver strong financial results in ever challenging market conditions, with a market capitalisation of circa £7 billion and over 6,100 employees across 38 locations. The founding family remains a core shareholder, holding approximately 44% of Schroders’ shares.

Schroders has benefited from a diverse business model of by geography, asset class and client type. It offers innovative products and solutions across four core growing business areas; asset management, solutions, Schroders Capital (private assets) and wealth management. Clients include insurance companies, pension schemes, sovereign wealth funds, high net worth individuals and foundations. Schroders also manages assets for end clients as part of its relationships with distributors, financial advisers and online platforms.

Schroders aims to provide excellent investment performance to clients through active management. It also channels capital into sustainable and durable businesses to accelerate positive change in the world. Schroders’ business philosophy is based on the belief that if we deliver for clients, we will deliver for our shareholders and other stakeholders.

Important Information: All investments involve risk, including the loss of principal. The views and opinions contained herein are those of Schroder Investment Management North America Inc.’s (SIMNA Inc.). These views and opinions are subject to change and should not be solely relied upon when making individual investment and / or strategic decisions This communication is intended to be for information purposes only and it is not intended as promotional material in any respect. SIMNA Inc. is registered as an investment adviser, CRD Number 105820, with the US Securities and Exchange Commission and as a Portfolio Manager, NRD Number 12130, with the securities regulatory authorities in Alberta, British Columbia, Manitoba, Nova Scotia, Ontario, Quebec and Saskatchewan. It provides asset management products and services to clients in the United States and Canada. Schroder Fund Advisors LLC (SFA) markets certain investment vehicles for which SIMNA Inc. is an investment adviser. SFA is a wholly-owned subsidiary of SIMNA Inc. and is registered as a limited purpose broker dealer with the Financial Industry Regulatory Authority and as an Exempt Market Dealer with the securities regulatory authorities in Alberta, British Columbia, Manitoba, New Brunswick, Newfoundland and Labrador, Nova Scotia, Ontario, Quebec, and Saskatchewan. SIMNA Inc. and SFA are indirect, wholly-owned subsidiaries of Schroders plc, a UK public company with shares listed on the London Stock Exchange. Further information about Schroders can be found at www.schroders.com/us or www.schroders.com/ca. Schroder Investment Management North America Inc., 7 Bryant Park, New York, NY, 10018-3706, (212) 641-3800.


Jennifer Manser O’Rourke, Schroders


Jennifer Manser O’Rourke, Schroders