One new study shows the vast majority of recent retirees are claiming Social Security benefits earlier than full retirement age, and that it’s costing them significantly.
Nationwide Retirement Institute, a platform of Nationwide, the Columbus, Ohio-based insurance and financial services company, found that 83% of recent retirees claimed Social Security early.
As a result, they’ll get almost 50% less in benefits than those that wait until they are 70, according to a survey of 902 pre-retirees and retirees.
About 61% of those claiming benefits early said a “life event” forced them to.
More than one-third of recent retirees said they chose to claim early because they needed the money. Health problems motivated the decision for 30% that drew early, and 24% said they did so because they lost their job.
The survey asked retirees what they were getting in monthly benefits in order to compare the value of waiting to claim against receiving benefits early.
Retirees drawing early reported a monthly benefit average of $1,174, compared to retirees that began drawing benefits at retirement age, $1,590, and those retirees that delayed benefits, who averaged $1,752 a month.
The spread between the higher and lower figure amounts to nearly $7,000 annually, or about $138,000 over the course of 20 years.