One of the most critical elements of retirement planning is when to claim Social Security benefits, and new data gives advisors insight into Americans' retirement income plans.
Forty-five percent of respondents expect to claim Social Security benefits before reaching full retirement age, according to newly released results from Schroders' 2026 U.S. Retirement Survey. Findings about retirees' top concerns were released earlier in the year.
Advisors say the decision on when to claim Social Security is rarely driven by age alone; rather, it depends on a client's broader financial plan.
"If you don't have other assets … well, then, yes, go walk through the Social Security window and get the money," David W. Johnston, partner and wealth management advisor at Flemington, New Jersey-based registered investment advisor OnePoint BFG Wealth Partners, said in an interview. But often, he said, longevity is the bigger factor.
For clients who are more affluent and in good health, waiting to claim and allowing Social Security benefits to grow can make sense, Johnston said. The break-even point generally falls somewhere between ages 78 and 82, he said.
But retirees don't have to choose only among claiming benefits at 62, at full retirement age or at 70.
Those are "not the only three dates that matter. It gets one-twelfth better every month," Johnston said. "You don't have to do it on your birthday or Christmas or January 1st."
Advisors can help build retirement confidence
Respondents also expect to rely on income sources besides Social Security. Fifty-five percent said they plan to use cash savings; 48% cited a 401(k), 403(b) or 457 plan; and 33% said they expect to use investment income outside an employer-sponsored plan.
The survey also found that most pre-retirement individuals were not confident about where their retirement income will come from. Schroders found that 16% of respondents anticipate replacing at least 75% of their final paychecks with Social Security and other sources of retirement income.
"While this study definitely sounds some alarms, the 84% who aren't confident need actionable roadmaps, not just warnings," Johnston added in an email. "Many of our clients do NOT experience a 25% reduction in preretirement income needs; rather, they spend a bit MORE early on. We refer to these as the 'Go Go Years,' then the 'Slow Go' years, followed by perhaps the 'No Go years.'"
Advisors can guide clients through how to both plan ahead and think during retirement about income.
"The results suggest that participants need more support transitioning from a savings mindset to an income mindset," Deb Boyden, head of U.S. defined contribution at Schroders, said in a statement. "Many workers understand how to accumulate assets, but they're less confident about how those assets will generate income throughout retirement."
Don't let fear drive claiming decisions
Overall, the survey findings reinforce trends advisors see in conversations with clients, Johnston said, including rising concerns about the health of the Social Security program.
The survey found 40% of respondents who plan to claim their Social Security benefits before reaching age 70 were concerned the trust fund "may run out of money or stop making payments." It is projected to run short in the fourth quarter of 2032, according to the latest Social Security and Medicare Trustees Reports, released in June.
"I don't know what percentage, but there's definitely a percentage of people who are taking it earlier than they, on paper, on the spreadsheet in the planning, should," Johnston said. "They have a little bit of a fear factor. … I don't think it's the most prudent decision, but I do understand it."
Yet when making recommendations, he advises against incorporating concerns regarding the potential depletion of the trust fund or subsequent benefit reductions.
"I have not recommended to any of our clients that, 'Hey, listen, you better go take your money and run now because it's not going to be there for you.' I don't believe that's the case. I think that's a little rash," Johnston said.
When clients bring up a friend's Social Security timing, he notes that many individual factors drove those choices before steering the conversation back to the client's unique circumstances.
"The herd mentality as it relates to Social Security claiming should be avoided at all costs because it's truly an individual planning decision," Johnston added.
