Financial advisors can do a better job of educating their clients on Social Security benefits, according to a recent survey that showed consumers remain unfamiliar with basic retirement planning strategies.
The report by the Financial Planning Association and AARP released Monday details how only 1 percent of almost 1,300 financial planners say their clients are very knowledgeable about claiming Social Security benefits. Of the over 1,200 consumers surveyed, about 9 percent felt they were very knowledgeable about benefits.
“There is a gap and it’s a knowledge gap. Our goal is to close it,” FPA President Ed Gjersten said, adding there are many opportunities for advisors to educate clients as well.
Currently, when asked where they get information on Social Security retirement benefits, 46 percent of consumers said from friends and family, while about 45 percent said from the administration directly. Only 16 percent said they ask a professional financial advisor.
“There are so many different resources…that we’re almost drowning in financial literacy resources. What we’re not doing and where the challenge is in connecting that knowledge with individuals that need that information,” Gjersten said.
That could mean consumers are missing out on thousands of dollars in benefits, AARP President Jeannine English said.
If consumers wait until their full retirement age, their monthly benefits can increase by 8 percent per year, English said. But only about 4 percent of men and 3 percent of women wait until they are 70 to claim their benefits.
“Because of that knowledge gap, people are not waiting as long as they could to claim their benefits," she said.
