The 2024 Annual Retirement Study from Allianz Life Insurance Company has revealed a significant knowledge gap among Americans regarding Social Security benefits and their role in retirement planning. This lack of understanding could have serious implications for financial security in retirement.
Cited in a recent BenefitsPro article, the Allianz study highlighted that more than half of Americans (53%) admit they don’t know much about Social Security or how it will fit into their retirement plans. This issue is even more pronounced among younger generations, with 60% of millennials and 51% of Gen Xers admitting their lack of knowledge.
Social Security benefits are a crucial component of retirement income for many Americans. However, the study found that a significant portion of the population is not fully aware of how these benefits work or how to maximize them. This gap in knowledge can lead to poor decisions, such as claiming benefits too early, which can result in reduced monthly payments for life.
Americans are increasingly looking to their employers to help them solve for retirement income planning challenges. And employers have an opportunity to play a pivotal role in bridging the Social Security knowledge gap. By providing resources and education about Social Security, they can help employees make informed decisions about how to maximize their benefits in retirement. This could include offering seminars, inviting experts to speak, or providing access to financial planning tools.
Retirement plan design can also help play a role in bolstering employees’ retirement security. Features such as an employer match, automatic enrollment, and guaranteed lifetime income products like an in-plan annuity can help employees make the most of this valuable workplace benefit and improve retirement outcomes.
Nonetheless, concerns about the future of Social Security are prevalent. Many Americans worry that the program may not be available throughout their retirement, which adds to the urgency of understanding and planning for these benefits. With worries that Social Security may run out of money, it is more important than ever for people to be proactive in their retirement planning.
The findings from the Allianz study underscore the need for increased financial literacy and proactive retirement planning. By improving their understanding of Social Security benefits, Americans can make better-informed decisions that will help ensure greater financial stability in their retirement years.
