Preparing For Retirement: Social Security Benefits

BOSTON (CBS) – I have more questions for you from the Fidelity’s IQ Retirement Survey.

Question #4: Given the current average life expectancy, if you want to retire at age 65, about how long would you need your retirement savings to last?

Answer: While one’s longevity is influenced by factors such as family medical history and lifestyle (exercise, diet, etc.), the average life expectancy is about 87 (85 for males, 87 for females), meaning the answer is approximately 22 years—a number one third of respondents got right. Thirty-eight percent of Americans estimated they would only need to make their hard-earned savings last for about 12-17 years, which could leave some at risk of running out of money in retirement. Since people are living longer, healthier lives, many—especially younger generations—need to plan for a retirement lasting 30 years or more.

Question #5: Approximately how much did the average monthly Social Security benefit pay in 2016?

Answer: Social Security is a key part of retirement income for most Americans, so it’s encouraging that 43% of respondents answered this one correctly: about $1,300. Even better, half of pre-retirees got it right. Still, with over 75 ways to claim and dozens of factors influencing one’s decision of when to retire, $1,300 is simply an average. In general, waiting until at least the time you’re entitled to full Social Security Retirement benefits (between 66-67) may help increase your monthly benefit. If you can afford to wait until age 70, monthly Social Security income will increase by 8% a year.

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You can hear Dee Lee’s expert financial advice on WBZ NewsRadio 1030 each weekday at 1:55 p.m., 3:55 p.m., and 7:55 p.m.

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