Financial experts agree that making the right decisions regarding an individual’s Social Security benefits can give a big boost to the amount of the monthly checks during retirement.

However, it appears that many Americans nearing retirement age are essentially leaving hard-earned cash on the table.

According to Schroders’ 2021 U.S. Retirement Survey, just ten percent of non-retired workers ages forty-five and over plan to wait until age seventy to begin filing for Social Security benefits. Do keep in mind that at that age, one can expect to receive the absolute maximum monthly payout, which is currently $3,895.

Moreover, thirty percent plan on taking Social Security between the ages of sixty-two and sixty-five, while fourteen percent plan to file between sixty-six and sixty-nine. About half of the respondents admit that they are unsure when they will claim Social Security.

The survey also indicated that the decision to collect benefits early appears to be a deliberate one. Nearly three-quarters of non-retired respondents overall and more than eighty percent of non-retired between ages sixty and sixty-seven are aware that the longer they wait to claim, the more money that they will eventually receive.

“Social Security is the primary source of income for the majority of Americans we surveyed, which is why we were surprised to see so many deciding not to wait until seventy for larger monthly payments; or worse, sacrificing their full benefits by tapping into them early,” notes Joel Schiffman, Head of Intermediary Distribution, North America, Schroders, per the American Society of Pension Professionals & Actuaries.

“And that’s a function of how much they have saved in order to generate sufficient income in retirement. Waiting a few extra years before claiming your benefits can provide a much-needed cushion for future expenses,” he added.

Max Benefits a Pipe Dream?

Even if individuals follow the advice step-by-step from their financial planners, most won’t come close to bagging the absolute maximum Social Security benefits.

“Most people who claim Social Security this year won’t be eligible for the maximum benefit,” the Motley Fool, a private financial and investing advice company, recently wrote. “In fact, the maximum benefit is really hard to get, no matter when you’re set to retire… Most people don’t earn enough to qualify for the maximum benefit. And seventy is hardly the most popular age to sign up for Social Security. Those who can snag $3,895 a month this year are therefore in the minority.”

Retirement Estimator Tool

One handy way to keep track of Social Security benefits that they potentially could be on the receiving end of is to make sure to check out the Social Security Administration’s (SSA) Retirement Estimator.

This tool “gives you a benefit amount based on your actual Social Security earnings record,” the SSA says. But do be warned that “these are just estimates.”

Ethen Kim Lieser is a Minneapolis-based Science and Tech Editor who has held posts at Google, The Korea Herald, Lincoln Journal Star, AsianWeek, and Arirang TV. Follow or contact him on LinkedIn.

Image: Reuters