Older adults today face a host of challenges when it comes to financing their retirements — and now, new data suggests some miscalculate how much money they’ll receive from Social Security.
A paper authored by researchers at the American Enterprise Institute and George Mason University found that a significant number of pre-retirees underestimate their future annual Social Security income by nearly $2,000. An even larger portion undervalued those benefits by over $5,000.
What the data says
The analysts compared respondents’ self-reported expectations of their retirement benefits to their actual projected Social Security income using panel data from a national study on health and retirement.
- They concluded that while most older adults between 50 and their early 60s accurately predicted the age at which they anticipate claiming Social Security benefits, they underestimated their yearly benefits by 11.5%, or about $1,896 on average.
- Roughly a quarter of respondents were off by even more in their calculations, underestimating their future benefits by $5,167 or more.
- About 10% said they didn’t expect to receive Social Security income at all.
- The findings are consistent with a 2021 analysis by the Social Security Administration, which…
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