Social Security benefits may not provide as much income as many older Americans expect — and that’s before possible cuts are needed to address a projected shortfall a decade from now.
Baby boomers anticipate that 47% of pre-retirement earnings will be replaced by Social Security, according to results of an annual survey from the Nationwide Retirement Institute. But the reality for someone making what the Social Security Administration considers the average wage in recent years, about $60,000, is more like 37%, according to the Committee for a Responsible Federal Budget. And the percentage drops as household income rises.
“We often see people form unrealistic expectations about what they will receive from Social Security and assume it is significantly greater than it truly is,” said Tina Ambrozy, senior vice president of strategic customer solutions at Nationwide. “For Boomers who are closer to retirement and may be relying on this income, this can be particularly detrimental to their finances.”
Read the full story on Bloomberg here.