Covid-19 has shone a spotlight on people’s lack of knowledge about Social Security, but it has also highlighted their desire to learn more about the program, according to the Nationwide Retirement Institute.
“We consider this a bright spot from our research,” says Tina Ambrozy, senior vice president of strategic customer solutions at Nationwide. “Adults are eager to know more now and they want to talk to a financial professional about it. One-quarter of people are seeking help from a financial professional for the first time in their lives now.”
People are looking for education about Social Security and other retirement options because Covid-19 has increased their concern about their ability to fund retirement, according to Nationwide’s “Social Security Survey,” which polled 2,026 adults for the Nationwide Retirement Institute in mid-May. The study was released Thursday.
“The Covid-19 pandemic has had a dire impact on Americans’ plans for retirement,” said Nationwide, which is based in Columbus, Ohio. “More than a third of Americans said their retirement plans have been impacted, most commonly because they will have to retire later than planned or won’t be able to retire at all.
“While many retirees receive Social Security as a source of retirement income, Covid-19 has 61% of adults across generations even more worried than before about Social Security running out of funding.”
“There was a lot of concern before the pandemic,” Ambrozy says, “because people felt they were not saving enough and they were worried about the stability of Social Security. Covid-19 has exacerbated that concern. Most adults do not understand the Social Security program rules and they are overestimating how much money they will get. This is a complex conversation advisors need to have with clients.”
Nationwide provides the Social Security 360 Analyzer to help advisors develop retirement plans for their clients, she says.
According to the firm’s Social Security survey, 63% of respondents said they think it is more important now than it was before the pandemic to optimize Social Security. More than one in four of those eligible for Social Security said the pandemic has caused them to change their decisions about when to file for benefits.
“As consumers assess their plans for retirement, general misconceptions and uncertainty around Social Security need to be addressed to ensure adults plan effectively and can maximize benefits,” the survey said.
An overwhelming majority of all generations did not know what their full retirement age is. Fewer than one in 10 adults knows all of the factors that determine the maximum benefit, the survey showed.