Consumer Social Security PR Study

Transcription

1 Consumer Social Security PR Study February 2018 Presented by The Harris Poll NFM-17470O

2 Target Group and Method This survey was conducted online from January 22 to February 5, 2018 to a targeted subset of the U.S. population: 1,013 U.S. adults aged 50 or older, who currently collect or plan to collect Social Security benefits and fall into one of the following groups: 10+ (Years) Retirees (n=335), Recent Retirees (n=339), or Future Retirees (n=339) Research participants were drawn from the Harris Poll Online (HPOL) research panel. Because the sample is based on those who were invited to participate in the HPOL panel (and not random), we cannot calculate estimates of theoretical sampling error. Sample of all U.S. respondents aged 50+ were weighted to the U.S. Population of adults aged 50+ by age-gender, race/ethnicity, education, region, household income and retired status. 1

3 Report Notes Current Retirees includes both Recent and 10+ years Retirees Older adults, adults, retirees include all qualified respondents n asterisk (*) in a data chart indicates that a response is less than 1% Significant differences among subgroups are noted at the 95% confidence level: Letters (, B, C) = significant difference from comparison group Some subgroups are too small to report quantitatively for PR. These are noted with caution. This report notes when bases are small (<100), or very small (<30) When subgroup sample sizes are too small to report quantitatively (<100), Total data is noted. t times, Total may also be provided as additional information. The Trended Data section highlights significant differences related to 2018, when sample size is greater than 100 2

4 Future Retirees expect to collect SS around age 66, on average One in three Future Retirees (29%) are currently receiving SS. Expectedly, they are less likely to be receiving SS than both Recent Retirees (85%) and 10+ Retirees (100%). On average, Recent Retirees and 10+ Retirees say they began collecting SS at age 62 and 61, respectively. In 2018, the average age that older adults expect to begin receiving SS is higher than it was in 2017 (65.8 vs. 65.1). Getting/Planning To Get SS Currently Receiving Expect to Receive Future Retirees () Recent Retirees (B) 71% BC 15% C 10+ Retirees (C) 29% 85% 100% B Collect ge: (Mean) (Expect to receive) (Began receiving) (Began receiving) Base: Qualified Respondents (Total n=1,013): Future (n=339); Recent (n=339); 10+ (n=335) Q615 Do you currently receive or will you receive Social Security? Q702 IF Receiving SS (Total n=705; Recent n=284; 10+ n=331): t what age did you begin collecting Social Security? IF Not Receiving SS (Total n=308; Future n=249): t what age do you think you will start to collect Social Security? 3

5 Over half of older adults do not plan to draw SS benefits before full retirement age Of Future Retirees who plan to draw SS, about a quarter (24%) plan to draw these benefits early, before reaching full retirement age, while about one in five (18%) are not sure if they will be drawing SS early. Total: Plan To Draw SS Benefits Before Full Retirement ge Yes (27%) No (53%) Not sure (19%) Yes No Not Sure Future Retirees Recent Retirees* 10+ Retirees** 18% 24% 28% 49% 58% 23% 100% *Caution, small base <100, results are directional in nature and stat testing is not shown **Caution, very small base <30, results are directional in nature and stat testing is not shown Base: Plan To Draw Social Security (Total n=308); Future (n=249); Recent (n=55); 10+ (n=4) Q713 Do you plan to draw Social Security benefits before you reach full retirement age? 4

6 Three quarters of Recent and 10+ Retirees incorrectly identified the age at which they are eligible for full SS benefits Most commonly, older adults think they are eligible for benefits sooner than they actually are. ge of Eligibility for Full Retirement Benefits Correctly Identified ge Eligible for Full SS Benefits Thinks They re Eligible for Full SS Benefits Later than they ctually re Thinks They re Eligible for Full SS Benefits Sooner than they ctually re Future Retirees () Recent Retirees (B) 10+ Retirees (C) 33% C 25% 22% 57% 10% C 65% 10% C 74% 4% Incorrect Response: 67% 75% 78% dded in 2018 Base: Qualified Respondents (Total n=1,013): Future (n=339); Recent (n=339); 10+ (n=335) Q7130. t what age are/were you eligible for full retirement benefits? 5

7 bout four in five current retirees would not change the age they started drawing SS Of those who would not change their drawing decision, about one in five cite having retired earlier than planned and/or heath problems as reasons they started drawing at that age. Would you change the age you started to collect SS if you could? Recent Retirees (B) 10+ Retirees (C) Reasons For Drawing SS t That ge (Of those who would not change decision) draw earlier draw later 4% 1% 5% 3% 13% 16% In 2018, Recent Retirees are less likely than in 2016 and 2014 to say they would change the age they started SS, and draw later if they could (13% in 2018 vs. 23% in 2016 and 2014). 78% 80% Retired earlier than planned Health problems Needed the money Did not need the money earlier Did not think I would live long enough to make it worth optimizing benefits Wanted the largest benefit possible Lost job Wanted to file before benefits are reduced Did not believe Social Security would be around Did not know there were different filing options at different ages Could not retire as early as planned Wanted to wait until I was in a more favorable tax bracket Other 23% 26% 21% 23% 20% 22% 17% 11% 15% 13% 10% 13% 9% 4% 8% 7% 7% 9% 2% 1% 2% 1% 1% 4% 22% 17% Widow benefits, wanted to start drawing at 62, could not find employment, my daughter was still in high school and she received a benefit Base: Currently Drawing Social Security (Total n=705): Recent (n=284); 10+ (n=331) Q712 Looking back on your decision to start at that age, would you change that decision if you could? Base: Would Not Change Drawing Decision (Total n=538): Recent (n=222); 10+ (n=254) Q710 Which of the following are reasons you drew Social Security at that age? Please select all that apply. 6

8 bout a quarter of current retirees overestimate their SS payment Over one in ten Recent Retirees (11%) and 10+ Retirees (13%) say their SS payment is less/much less than expected. bout two thirds of Recent Retirees (65%) and three in five 10+ Retirees (56%) say their SS payment is what they expected. Is your SS payment what you expected? 1% 4% 11% 10% 13% Much more/ 10% More than expected 65% 56% Much more than I expected More than I expected Less/ Much less than expected 24% 18% 30% 23% 6% 7% Recent Retirees (B) 10+ Retirees (C) The same as I expected Less than I expected Much less than I expected Base: Currently Drawing Social Security (Total n=705): Recent (n=284); 10+ (n=331) Q724 Is your Social Security payment more, the same as or less than you expected? 7

9 Vast majority of older adults expect to spend or are spending their SS on groceries Future Retirees are more likely than 10+ Retirees to say that they expect to spend or are spending their SS on healthcare (64% vs. 53%) and vacation (39% vs. 25%). Recent Retirees and 10+ Retirees are more likely than Future Retirees to say that they expect to spend or are spending their SS on debt, savings, and charity. 86% 85% 83% Social Security used for Retirement Expenses Future Retirees () Recent Retirees (B) 10+ Retirees (C) 64% C 58% 53% 56% 57% 54% 40% C 39% 36% 32% 30% 25% 33% 29% 29% 26% 27% 24% 18% 16% 15% 15% 13% 10% 8% B 3% 9% B 3% 1% 1% Groceries Healthcare Housing Entertainment Vacation Debt Savings Charity Helping family members Investing Student loans In 2018, Future Retirees are less likely to say that they expect to spend their SS on housing (54% vs. 67% in 2017) Base: Qualified Respondents (Total n=1,013): Future (n=339); Recent (n=339); 10+ (n=335) Q905. On which of the following expenses do you [expect to] spend your Social Security benefits in retirement? There are no significant differences in healthcare (or other) expenses compared to Note: Other not displayed 8

10 Retirees, on average, expect to spend about half of their total retirement income on groceries and housing in retirement Healthcare follows next with Future Retirees spending more than their counterparts. 28% 27% 25% 24% 24% 24% Mean % of Retirement Income Used for Expenses Future Retirees () Recent Retirees (B) 10+ Retirees (C) 17% BC 13% 13% 11% C 8% 8% BC 6% 5% 4% 4% 6% 8% 5% 7% 9% 2% 2% 2% 2% B * 3% B 3% 2% 1% 1% * * Groceries Housing Healthcare Vacation Entertainment Debt Savings Helping family members There are no significant differences in healthcare (or other) expenses compared to Base: Qualified Respondents (Total n=1,013): Future (n=339); Recent (n=339); 10+ (n=335) Q910. What percentage of your total retirement income do you [expect to] spend on each of the following in retirement? Investing Charity Student loans Note: Other not displayed 9

11 Expected SS payments higher, on average, than payments currently receiving Most commonly, Future Retirees (36%) used an online SS calculator to calculate their future payment. Whereas the majority of Recent (62%) and 10+ Retirees (66%) contacted SS administration. Social Security Payment Expecting/Receiving (Mean) In 2018, recent retiree s average monthly payment they are receiving is lower than as reported in 2017 ($1262 vs. $1487). Future Retirees () $1,588 Recent Retirees (B) $1, Retirees (C) $1,256 How did you arrive at that dollar amount? BC Used online Social Security calculator I guessed Contacted Social Security administration Social Security/ SS statement/ letter/ report I calculated it based on how much I earned during my working career or based on my most recent salary Other I don't know 36% 22% 19% 10% 5% 3% 0% 16% 9% * 2% 3% * 5% 2% 0% * 9% 16% C 62% 66% (Expecting) (Receiving) Base: Qualified Respondents (Total n=1,013): Future (n=339); Recent (n=339); 10+ (n=335) Q720 What monthly payment are you currently receiving/expecting to receive from Social Security? Base: Not Getting SS and Provided Expected Monthly Dollar mount (Total n=206); Future (n=172) Q722 Which one of the following best describes how you arrived at this dollar amount? Base: Getting SS (Total n=705); Recent (n=246); 10+ (n=331) Q1722 Which one of the following resources helped you to best identify the monthly Social Security payment amount you would receive prior to retiring? Note: Only responses >3% among Total are displayed 10

12 Most who would draw SS later say it is so they can receive the largest benefit possible One in in five (20%) would start later because they didn t need the money now. Of those planning to start drawing early, about a third (31%) say they will do so because do not believe SS will be around at their full retirement age. Reasons Planning Start Drawing SS Early* Reasons Would Start Drawing SS Later Retire earlier than full retirement age 58% Wanted the largest benefit possible 81% Do not believe Social Security will be around at full retirement age Expect benefits to be reduced before I reach full retirement age Do not think I will live long enough to make it worth optimizing benefits Expect to need the money earlier Expect health problems before full retirement age Expect to lose my job Other mentions 12% 7% 31% 26% 22% 22% 18% Why wait, expect to live a long time, able to draw off my retired husband Didn't need the money now Did not think I would live long enough to make it worth optimizing benefits Wanted to wait until I was in a more favorable tax bracket Could not retire as early as planned Wanted to stay with my company for 50 years, health problems Other 20% 13% 10% 1% 13% *Caution, small base <100, results are directional in nature and stat testing is not shown Base: Plan To Draw Benefits Early (Total n=81) Q714 You indicated that you plan to draw Social Security benefits before full retirement age. Which of the following are reasons you would start drawing Social Security benefits early? Please check all that apply. Base: Would Start Drawing Social Security Later (Total n=117) Q711 You indicated that you would start to draw Social Security later. Which of the following are reasons you would start drawing Social Security later? Please check all that apply. 11

13 Current Retirees drawing early need(ed) the money for living expenses or to supplement income 10+ Retirees most commonly attribute their need for SS money to supplementing their income (55%), while Recent Retirees cite needing the money to pay for their living expenses (61%). Why did you need the SS money earlier? Total Current Retirees Recent* and 10+ Retirees* To pay my living expenses To supplement my income I [will be retiring/ retired] earlier than expected 23% 43% 52% 61% 43% 31% 55% 22% 25% Recent Retirees 10+ Retirees Laid off or unemployed 24% 29% 18% No other source of income 22% 13% 29% I have health issue To start saving money sooner Looking for work, or a better paying job Other 16% 9% 4% 1% 21% 11% 9% 10% 3% 5% 1% 0% *Caution, small base <100, results are directional in nature and stat testing is not shown Base: Need The Money Earlier (Current Retirees n=121); Recent (n=64); 10+ (n=57) Q715 You indicated that you [would start/started] drawing Social Security benefits [early] because you [expect to need/needed] the money earlier. Why [do you think you will/did you] need the money earlier? 12

14 Over half of older adults would not change their SS drawing decision However, 17% of Recent and a quarter of 10+ (27%) Retirees would change their drawing decision. Total: Yes (24%) No (54%) Not sure (22%) Would Still Have Drawn SS Regardless of Life Event Yes No Not sure Future Retirees** Recent Retirees 10+ Retirees 22% 32% 23% 17% 23% 27% 46% 61% 50% In 2018, those who would not change their drawing decision due to any life event are more likely than in 2016 to say they would not have drawn (54% vs. 40%). **Caution, very small base <30, results are directional in nature and stat testing is not shown Base: Would Not Change Drawing Decision Due to ny Life Event (Total n=241); Future (n=26); Recent (n=100); 10+ (n=115) Q715B You indicated that you started drawing Social Security benefits due to [a lost job/health problems/needing the money]. If it were not for [this reason/these reasons], would you still have started drawing Social Security benefits at this age? 13

15 Future Retirees most likely to indicate retirement and savings accounts, employment as additional sources of retirement income 10+ Retirees most commonly cite a pension (54%) as an additional source of retirement income. On average, Future (52%), Recent (56%) and 10+ (54%) Retirees expect SS to cover half or more of their expenses. In 2018, Future Retirees are less likely than in 2014 to say they will have a pension (36% vs. 48%) Sources of Retirement Income Future Retirees () Recent Retirees (B) 10+ Retirees (C) vg. % of Expenses Expect SS to Cover: Future Retirees: 52% Recent Retirees: 56% 10+ Retirees: 54% 70% BC 41% 43% 51% BC 37% 38% 46% 36% 54% 33% 31% 27% 29% BC 4% 1% 19% 15% 30% B 15% B 8% 9% 10% 5% 6% 8% 24% 19% Retirement accounts (401k, IR, etc.) Savings accounts Pension Stocks, bonds, or mutual funds Employment (full or part time) nnuities Inheritance Insurance None of these Note: Only responses >3% among Total are reported Base: Qualified Respondents (Total n=1,013): Future (n=339); Recent (n=339); 10+ (n=335) Q716 In addition to Social Security, [do you have/will you have] any of the following sources of retirement income? Please select all that apply. Q813 What percent of your expenses [do/do you expect] your Social Security benefits [to] cover? 14

16 Retirees say SS is/will be their primary source of retirement income Future Retirees (28%) are more likely than Recent (10%) and 10+ (9%) Retirees to say that their primary source of retirement income will be retirement accounts. Primary Source of Retirement Income Future Retirees () Recent Retirees (B) 10+ Retirees (C) 50% 51% 42% 29% 25% 28% BC 14% 10% 9% BC 4% 5% 6% 2% * 0% 1% 3% 4% C 1% 1% 2% 3% * * * * 0% 1% 4% 4% Social Security Pension Retirement accounts (401k, IR, etc.) Stocks, bonds, or mutual funds Employment (full or part time) nnuities Savings accounts Inheritance Insurance Other Base: Has sources of retirement income in addition to SS(Total n=844); Future (n=303); Recent (n=269); 10+ (n=272) Q901 Which of the following [is/will be] your primary source of retirement income? 15

17 bout two in five of each Retiree group expect their living expenses to remain the same third of each group expects their living expenses to decrease in retirement. Living Expenses in Retirement Increase Stay the same Decrease Future Retirees () Recent Retirees (B) 10+ Retirees (C) 34% 22% 33% 21% 33% 30% 44% 46% 38% Future Retirees are less likely in 2018 than in 2017 to say that they expect living expenses to increase in retirement (22% vs. 33%) Base: Qualified Respondents (Total n=1,013): Future (n=339); Recent (n=339); 10+ (n=335) Q750 [Did your/do you expect your] living expenses [to ] increase, decrease or stay the same in retirement? 16

18 Cost of living continues to be the top reason expenses increase in retirement Most Future Retirees say their living expenses will increase in retirement because of inflation (82%). 87% 80% 82% 76% Reasons Living Expenses [Will Increase/Increased] in Retirement Future Retirees * Recent Retirees * 10+ Retirees 63% 59% 61% 48% 43% 45% 43% 51% 39% 40% 42% 37% 36% 28% 17% 11% 9% 11% 6% 21% 3% 2% 9% Cost of living Inflation My expenses My health I'm no longer working My income My physical activity level My savings Total: 81% 69% 50% 42% 42% 35% 13% 13% 5% Change in number of household members *Caution, small base <100, results are directional in nature and stat testing is not shown Base: Respondents Whose Living Expenses Increased (Total n=248); Future (n=80); Recent (n=67); 10+ (n=101) Q755 [Why did your living expenses/do you expect your living expenses to] [ increase ]? That is, what do you believe that is due to? Note: Only responses >3% among Total are displayed 17

19 Most say decrease in living expenses is primarily due to overall expenses Over half of Recent (55%) and 10+ (51%) Retirees attribute no longer working to a decrease in living expenses in retirement. Reasons Living Expenses [Will Decrease/Decreased] in Retirement 70% Future Retirees() Recent Retirees (B) 10+ Retirees (C) 58% 62% 45% 55% 51% 22% 22% 23% 18% 19% 20% 23% 28% 13% 12% 13% 15% 10% 11% 11% 8% 8% 6% 7% 6% 6% 7% 3% 4% Expenses No longer working My income Cost of living Change in number of HH members Physical activity level Savings Health Paid off mortgage Inflation Total: 64% 50% 22% 19% 21% 12% 11% 8% 6% 5% Base: Respondents Whose Living Expenses Decreased (Total n=338); Future (n=120); Recent (n=116); 10+ (n=102) Q755 [Why did your living expenses/do you expect your living expenses to] [ decrease ]? That is, what do you believe that is due to? 18

20 Future Retirees least likely to say life in retirement will be/is better Over a quarter of Recent (27%) and 10+ (26%) Retirees say life in retirement is worse than before retirement. [Is/Will] life in retirement [be] better or worse than before retirement? Better The same Worse Future Retirees () Recent Retirees (B) 10+ Retirees (C) 21% 21% 27% 32% 26% 31% 58% BC 40% 44% In 2018, Future Retirees are more likely than in 2016 to say life is expected to be the same as it was before retirement (58% vs. 47%). Base: Qualified Respondents (Total n=1,013): Future (n=339); Recent (n=339); 10+ (n=335) Q745 Is your life/do you expect life in retirement [to be] better, the same or worse than before retirement? 19

21 Both Recent and 10+ Retirees cite no longer working as the top reason why life is better in retirement Recent Retirees (75%) cite income, while 10+ Retirees (85%) cite cost of living as the top reason why life is worse in retirement. Retirees: Why is life better/worse? Recent Retirees (B) 10+ Retirees (C) I'm no longer working My expenses My health My savings My physical activity level My income Cost of living Change in number of household members Better: Retiree Major Mentions (n=224) Recent Retirees (n=117), 10+ Retirees (n=107) Free to do what I would like 82% 87% My income 45% 45% Cost of living 37% 34% My expenses 33% 38% My health 31% 29% I'm no longer working 27% 33% Inflation 16% 10% My savings 5% B 25% My physical activity level 3% 1% Change in number of household members Worse: Retiree Major Mentions (n=185) Recent Retirees (n=97)*, 10+ Retirees (n=88)* 8% 3% 67% 67% 66% 59% 67% 47% 58% 43% 57% 32% 38% 32% 43% 75% 73% 85% *Caution, small base <100, results are directional in nature and stat testing is not shown Base: Retired Respondents Q746 Why do you believe your life is [ better OR the same OR worse ]? That is, what do you believe that is due to? Note: Only responses >3% among Total are displayed 20

22 third of Recent and 10+ Retirees say health problems are interfering with their retirement However, about three in five Recent (59%) and 10+ (69%) Retirees were able to do the things they wanted when they retired. ble to do things wanted in retirement? Health problems interfering with retirement? Recent Retirees (B) 10+ Retirees (C) Recent Retirees (B) 10+ Retirees (C) 41% 59% 31% 69% Yes No 65% 35% 63% 37% Current Retirees: 64% Yes Current Retirees: 36% Yes Compared to 2017, Current Retirees are less likely to say they are able to do the things they wanted to do in retirement (64% vs. 74% in 2017). Reasons Not ble to do Things Wanted *: Couldn t afford to do those things: 85% Had to take care of loved ones: 19% Had to continue working: 4% Poor Health: 1% Other: 9% There are no significant differences between Retiree Groups. *Caution, small base <100, results are directional in nature Base: Retired Respondents (Total n=674); Recent (n=339); 10+ (n=335) Q760 Were you able to do the things you wanted when you retired? Base: Did Not Do The Things Wanted To fter Retirement, Not Health Related (Total n=73) Q785 Why were you not able to do the things you thought you would when you retired? Base: Retired Respondents (Total n=674); Recent (n=339); 10+ (n=335) Q765 Do health problems keep you from living the retirement you expected? 21

23 Health problems occurred much sooner than expected for many retirees Eight in ten 10+ Retirees (80%) say health problems that occurred sooner than expected, with 63% saying they occurred more than 5 years sooner than they expected. Were health problems sooner than expected? Yes How much earlier? Recent Retirees (B) 10+ Retirees (C) Recent Retirees (B) 10+ Retirees* 10% 30% 9% 6% 70% 60% 31% 68% 26% 90% Yes No Current Retirees: 80% Yes Current Retirees: (8%) (29%) (63%) year sooner than I expected More than 1 year but less than 5 years More than 5 years sooner Up significantly since 2014 (80% vs. 68%). *Caution, small base <100, results are directional in nature and stat testing is not shown Base: Had Health Problems (Total n=245); Recent (n=116); 10+ (n=129) Q770 Did those problems occur earlier in your retirement than you expected? Base: Health Problems Occurred Earlier Than Expected (Total n=192); Recent (n=100); 10+ (n=92) Q775 How much earlier did health problems occur? 22

24 Health care expenses keep about a quarter of Current Retirees from living the retirement they expected Most Recent (75%) and 10+ (79%) Retirees say that health care expenses do not interfere with retirement life as expected. Health Care Expenses Interfere With Retirement Life Expected? Recent Retirees (B) 10+ Retirees (C) 75% 25% Yes No 79% 21% Current Retirees: 24% Yes Results are consistent with previous years. Base: Retired Respondents (Total n=674); Recent (n=339); 10+ (n=335) Q780 Do health care expenses keep you from living the retirement you expected? 23

25 quarter of Future Retirees admit to not knowing expenses might be withheld from SS Two in five Future Retirees (41%) say that they don t know what can be withheld or, incorrectly indicate that nothing can be withheld from SS payments. Future Retirees are more likely in 2018 than in 2014 to say that Medicare Part B might be withheld from SS payments (52% vs. 40%). 55% 52% 66% B 41% B Perceived SS Withholdings Future Retirees () Recent Retirees (B) 10+ Retirees (C) Less than 1% of older adults accurately identified all the expenses that might be withheld from Social Security payments: Medicare Part B Premiums, Medicare Part D, child support, and alimony 41% Future Retirees 29% 29% B 11% 11% 9% 5% 6% B 7% 5% 3% 3% 5% 2% 1% C 25% BC 14% 9% 24% C 16% 13% Medicare Part B Premiums Medicare Part D Employment taxes Not withheld Medical / Dental expenses Child Support limony I don't know Nothing is withheld from Social Security payments Recent Retirees are more likely in 2018 than in 2014 to say that they don t know (14% vs. 6%). Recent Retirees are more likely in 2018 than in 2015 to say that nothing is withheld from SS payments (24% vs. 11%). Base: Qualified Respondents (Total n=1,013): Future (n=339); Recent (n=339); 10+ (n=335) Q718 Which of the following types of expenses might be withheld from Social Security payments? 24

26 Basic Social Security facts understood by most older adults 10+ Retirees are most likely group to know that Social Security benefits are not tax-free, while future retirees are least likely to know that if someone is enrolled in SS and Medicare, a portion of their Medicare expenses are deducted directly from their SS checks. Correct Responses Future Retirees () Recent Retirees (B) 10+ Retirees (C) Social Security offers widow and widower benefits* (T) Social Security may offer benefits for your spouse or children (T) If you continue to work after your full retirement age, you will not receive Social Security retirement benefits (F) If someone is enrolled in Social Security and Medicare, a portion of their Medicare expenses are deducted directly from their Social Security checks* (T) If a person is divorced, he or she may be eligible for Social Security benefits based on the ex-spouse's record (T) Social Security benefits are tax-free^ (F) 89% 83% 81% 66% 65% 58% 86% 88% 81% 87% 81% 81% 79% 83% 71% 70% 64% 75% B *dded in 2018 ^Updated in 2018 Base: Qualified Respondents (Total n=1,013): Future (n=339); Recent (n=339); 10+ (n=335) Q735 Do you believe the following statements to be true or false? 25

27 However, some Social Security facts still cause some confusion The vast majority of older adults do not realize that children under 18 are not eligible for Social Security benefits on their parent s records. Correct Responses Future Retirees () Recent Retirees (B) 10+ Retirees (C) Social Security offers guaranteed income for life (T) 48% 55% 58% fter your full retirement age, there is no limit on what you can earn by working (T) 49% 42% 39% (55%) Your income level does not impact the amount you are charged for Medicare premiums* (F) 42% 45% 46% Social Security is not protected against inflation (F) 40% 40% 41% The new 2018 tax laws make changes to Social Security (F) Children under 18 are eligible for Social Security benefits on their parent's records (F) *dded in 2018 Base: Qualified Respondents (Total n=1,013): Future (n=339); Recent (n=339); 10+ (n=335) Q735 Do you believe the following statements to be true or false? 14% 23% B 20% 22% 8% 13% / arrows = significantly higher/lower than 95% 26

28 Older adults underestimate how long the average 65 year old will live On average, older adults think women will live to be 83.6, when in actuality they will live to be 86.6 years old. verage ge verage 65 Year Old Will Live To Men ctual Men* Women ctual Women* Future Retirees Recent Retirees 10+ Retirees dded in 2018 *Source: SS Life Expectancy Calculator: Base: Qualified Respondents^ (Total n=507): Future (n=170); Recent (n=169); 10+ (n=168) Q7350. To what age do you think the average 65 year old man will live? ^Respondents were randomly spilt between these two questions. Base: Qualified Respondents^ (Total n=506): Future (n=169); Recent (n=170); 10+ (n=167) Q7350B. To what age do you think the average 65 year old woman will live? 27

29 Future Retirees are most likely group to worry about SS program running out of funding in their lifetime Less than half of Future Retirees (47%) say they know exactly how to maximize their SS benefits. Strongly/Somewhat gree Future Retirees () Recent Retirees (B) 10+ Retirees (C) I worry about the Social Security program running out of funding in my lifetime 72% BC 58% 53% I know exactly how to maximize my Social Security benefits 47% 52% 56% Social Security on its own should be enough to help me live comfortably in retirement 26% 19% 27% There is not much difference in benefits whether you take Social Security early or not 13% 18% 24% (12%) Base: Married or Separated Total (n=617); Future (n=221); Recent (n=201); 10+ (n=195) Base: Divorced and Retired Total (n=98)*; Recent (n=50); 10+ (n=48) I am planning to divorce after I retire I became divorced after I retired N 4% 2% 1% 3% 15% 8% of all retirees say they became divorced after they retired *Caution, small base <100, results are directional in nature and stat testing is not shown Base: Qualified Respondents (Total n=1,013): Future (n=339); Recent (n=339); 10+ (n=335) Q740 How much do you agree or disagree with the following statements? / arrows = significantly higher/lower than 95% 28

30 Older adults agree that the Social Security system is in need of change Most commonly, Future (69%), Recent (61%), and 10+ (58%) Retirees who agree the SS system is in need of change feel that it needs increased funding. The Social Security system is in need of change Changes needed to Social Security system 79% gree 28% 25% 51% 16% 20% 11% 5% 5% 4% Future Retirees () 75% Strongly disagree Somewhat agree 50% Recent Retirees (B) 85% (74%) 36% 48% 10+ Retirees (C) Somewhat disagree Strongly agree Base: Qualified Respondents (Total n=1,013): Future (n=339); Recent (n=339); 10+ (n=335) Q740 How much do you agree or disagree with the following statements? Increased funding Less taxation of benefits Increased reimbursement amounts Increased full retirement age Reduced age of eligibility Use of import taxes for funding Other 32% 38% 28% 19% 22% 22% 20% 13% 9% (4%) 15% 11% 11% C 13% 18% 23% 69% (62%) 61% 58% (51%) 48% (56%) 53% 48% (27%) (34%) Future Retirees () Recent Retirees (B) 10+ Retirees (C) / arrows = significantly higher/lower than 95% (xx%) without arrows indicate larger, but non-significant differences from 2017 Base: grees SS System Needs Change (Total n=803); Future (n=276); Recent (n=258); 10+ (n=269) Q915 You indicated that the Social Security system is in need of change. In which of the following ways do 29 you think the Social Security system needs change?

31 bout three in five older adults are concerned about cuts to SS under the current administration bout half of Future (55%), Recent (49%), and 10+ (45%) Retirees agree that there will be cuts to Social Security under the current presidential administration. There will be cuts to Social Security under the current presidential administration Concerned about cuts to SS under current presidential administration C 55% gree 17% 15% (25%) 18% 39% C 49% 45% 27% 34% 64% Concerned 33% 32% 30% 60% 61% (56%) 31% 28% 31% 28% 31% 36% 21% 21% 22% 16% 20% 19% 15% 20% 17% Future Retirees () Recent Retirees (B) 10+ Retirees (C) Future Retirees () Recent Retirees (B) 10+ Retirees (C) Strongly disagree Somewhat agree Somewhat disagree Strongly agree Not at all concerned Somewhat concerned Not very concerned Very concerned / arrows = significantly higher/lower than 95% (xx%) without arrows indicate larger, but non-significant differences from 2017 Base: Qualified Respondents (Total n=1,013): Future (n=339); Recent (n=339); 10+ (n=335) Q740 How much do you agree or disagree with the following statements? Q920 How concerned are you about Social Security benefits getting cut by the current presidential administration? 30

32 Older dults feel responsibility for funding Social Security should be shared bout three in four Future (74%) and 10+ (73%) Retirees feel that Social Security should be funded by employers. Who should be responsible for funding Social Security? Future Retirees () Recent Retirees (B) 10+ Retirees (C) 74% 68% 73% 69% 71% 74% 64% 64% 66% 3% 3% 5% Employers Employees Federal Government Other Future Retirees are more likely in 2018 than in 2017 to say employers (74% vs. 64%). Base: Qualified Respondents (Total n=1,013): Future (n=339); Recent (n=339); 10+ (n=335) Q925 Who should be responsible for funding Social Security? Please select all that apply. 31

33 Half or more older adults believe that age or benefit start date determines SS benefits bout one in seven incorrectly believe that life expectancy determines the maximum Social Security benefit. What Determines The Maximum Social Security Benefit? Future Retirees () Recent Retirees (B) 10+ Retirees (C) ge Benefit start date Marital status 20% 17% 17% 62% 57% 55% 74% 67% 64% C Only 12% of Future and Recent, and 11% of 10+ Retirees accurately identified all three factors that determine the maximum SS benefit an individual can receive. Life expectancy (false) Family medical history (false) 2% 1% 1% 15% 12% 16% Compared to 2016, 2015 and 2014, Older dults in 2018 are more likely to incorrectly believe that life expectancy determines the maximum social security an individual can receive (14% vs. 7%, 8%, 8%) ll of the above (false) 17% 23% 22% Base: Qualified Respondents (Total n=1,013): Future (n=339); Recent (n=339); 10+ (n=335) Q742 What factors determine the maximum Social Security benefit an individual can receive? 32

34 bout half of Older dults are not sure, or don t know the percentage of tax increase that would fully fund SS for 75 years Further, two in five Future (43%) and 10+ (41%) and a third of Recent (33%) Retirees incorrectly identify the percentage of tax increase that would keep SS fully funded for 75 years. Percentage of Tax Increase on Income of Private Employees that Will Keep Social Security Fully Funded for 75 Years Future Retirees () Recent Retirees (B) 10+ Retirees (C) Incorrect: 43% Future, 33% Recent, % 48% 57% 49% 13% 9% 11% 10% 11% 8% 9% 8% 10% 9% 8% 10% 3% 4% 5% 4% 1% 3% 2% 2% 1% 2% 2% 4% 1-2% 3-4% 5-6% 7-10% 11-15% 16-20% 21-25% More than 25% Not sure/don't know dded in 2018 Base: Qualified Respondents (Total n=1,013): Future (n=339); Recent (n=339); 10+ (n=335) Q9250. What percentage of tax increase on income of private employees do you think would keep Social Security fully funded for the next 75 years? 33

35 lmost three in ten older adults currently work with a financial advisor Overall, just over one in ten older adults (13%) say their financial advisor has provided advice on how to handle Social Security. Of those working with a financial advisor, over four in ten retirees say the same. Total Incidence of having a F who provided SS advice: 13% Works with a Financial dvisor F Provided dvice on SS? Yes, one Yes, more than one No Yes No Future Retirees () Recent Retirees (B) 10+ Retirees (C) Future Retirees () Recent Retirees (B) 10+ Retirees (C) 68% 27% 5% 71% 27% 2% 70% 27% 3% 51% 49% 65% 35% 64% 36% Total: Yes, one (27%), Yes, more than one (3%) No (69%) Total: Yes (42%), No (58%) Base: Qualified Respondents (Total n=1,013): Future (n=339); Recent (n=339); 10+ (n=335) Q800 Do you currently work with a professional financial advisor? Base: Working With Financial dvisor (Total n=325); Future (n=124); Recent (n=101); 10+ (n=100) Q802 Has your financial advisor provided advice on how to handle Social Security? 34

36 Of those given SS advice by a F, about two in five initiated the discussion themselves Most commonly Future Retirees (48%) say that they had the discussion a while after they started working with a financial advisor, while Recent Retirees (43%) say they had the discussion immediately, and 10+ Retirees (63%) say they had the discussion a shortly after they started working with their financial advisor. How soon did the SS discussion happen once Who initiated the F SS discussion? you started working with an advisor? Future Retirees* Recent Retirees* 10+ Retirees ** Future Retirees* Recent Retirees* 10+ Retirees** Total: 54% Me 61% 49% 42% 43% 38% 63% 48% 32% Financial dvisor 25% 32% 48% 13% 23% 27% 30% 15% 14% My spouse, partner or family member 14% 10% 19% Total: Immediately Shortly afterwards fter a while 23% 41% 36% *Caution, small base <100, results are directional in nature and stat testing is not shown **Caution, very small base <30, results are directional in nature and stat testing is not shown Base: Have Gotten dvice On Social Security (Total n=137); Future (n=61); Recent (n=41); 10+ (n=35) Q806 In discussions with your financial advisor, who initiated conversations about Social Security? Q1717 t what point after you started working with your financial advisor did the Social Security conversation happen? *Caution, small base <100 35

37 Majority of older adults have followed their F's SS advice bout a quarter say they followed the advice of their F completely. Did you follow the F s SS advice?* Why didn t you follow the F s SS advice?** 24% 27% 27% Retired earlier than planned Needed the money now 15% 13% 51% 75% Yes 95% 100% Lost job 8% 68% 73% Yes, completely Could not retire as early as planned 8% 23% 1% 2% 4% Future Retirees* Recent Retirees * 10+ Retirees* Yes, mostly Not yet, but will No Did not think I would live long enough to make it worth optimizing benefits Did not believe Social Security would be around 7% 2% Total: Yes, completely (26%) Yes, mostly (60%) Not yet, but will (12%) No (2%) Other 64% *Caution, small base <100, results are directional in nature and stat testing is not shown **Caution, very small base <30, results are directional in nature and stat testing is not shown Base: Have Gotten dvice On Social Security (Total n=137); Future (n=61); Recent (n=41); 10+ (n=35) Q808 Have you followed the advice given to you by your financial advisor regarding Social Security benefits? Base: Did Not Follow The F dvice Regarding SS Benefits (Total n=19) Q809 You indicated that you have not followed the advice given to you by your financial advisor. Which of the following are reasons you have not followed that advice? Please check all that apply. 36

38 Majority of older adults working with an F and who have not been advised on SS do not expect this advice from their F Less than one third with an F who have not been advised on SS (29%) say SS advice is something they expect from their F. Expect Social Security dvice From F Yes No 29% 71% 2018 F Social Security advice expectations are on par with previous years. Base: Work With F nd Have Not Been dvised On Social Security (Total n=188) Q804 Is Social Security advice something you expect from your financial advisor? 37

39 Three quarters of Future Retirees who work with a F likely to switch Fs to maximize SS benefits strong majority of those who do not work with a F don t plan to ask about SS in the next six months. (Work with or plan to work with F) Likelihood of Switching F to Maximize SS Benefits (Do not work with a F) Plan on asking F about SS in next 6 months? Total: 62% Future Retirees () Recent Retirees (B) 10+ Retirees (C) Extremely/ 13% 23% B 21% Somewhat likely C C1% 1% 27% 2% 17% 6% 46% C 33% 72% 61% Extremely/ 40% 49% Somewhat 71% C likely 81% 93% 37% 26% 1% Future Retirees () Extremely likely Not very likely 29% 10% Recent Retirees (B) Somewhat likely Not at all likely 17% 10+ Retirees (C) Yes No Not sure Similar to 2015 and 2017, Future Retirees in 2018 are less likely than those in 2016 to say they plan on asking a F specifically about SS benefits in the next 6 months (2018: 2%, 2017: 2% and 2015: 3% vs %). Base: Work With a F OR Plan To (Total n=340); Future (n=132); Recent (n=104); 10+ (n=104) Q812 If a financial advisor could not show you how to maximize your Social Security benefits, how likely would you be to find an advisor who could? Base: Don t Work With a F (Total n=688); Future (n=215); Recent (n=238); 10+ (n=235) Q810 Do you plan on asking a financial advisor specifically about Social Security benefits in the next 6 months? 38

40 round half those working with a F feel it is extremely/very important to be updated on legislative changes that may affect retirement lmost three in five Future Retirees (57%) say that is extremely or very important that their financial advisor update them about legislative changes that may affect their retirement. Total: Extremely/ Very Important (54%) Not at ll/somewhat Important (46%) (Work with F) Importance of Update By F bout Legislative Changes That May ffect Retirement Extremely important Very important Somewhat important Not at all important 57% Extremely/ Very important 20% 19% 19% 56% 47% 29% 37% 37% 38% 35% 44% 6% 9% 9% Future Retirees () Recent Retirees (B) 10+ Retirees (C) Base: Work With a F (Total n=325); Future (n=124); Recent (n=101); 10+ (n=100) Q811 How important to you is being updated by your financial advisor about legislative changes that may affect your retirement? 39

41 Majority of married older adults know spouse s retirement plans Current Retirees are more likely than Future Retirees to be knowledgeable. Strongly/Somewhat gree Future Retirees () Recent Retirees (B) 10+ Retirees (C) My spouse knows when I will begin collecting Social Security 78% 94% 98% I know at what age my spouse will retire 79% 94% 92% My spouse knows at what age I will retire 76% 95% 95% I know when my spouse will begin collecting Social Security 73% 93% 94% My spouse and I are coordinating when and how we file for Social Security, to maximize our benefits 65% 72% 73% dded in 2018 Base: Qualified Married Respondents (Total n=601); Future (n=214); Recent (n=195); 10+ (n=192) Q8014. How much do you agree or disagree with the following statements? 40

42 Familiarity with the restricted filing strategy is low Two-thirds of 10+ Retirees (64%) have never heard of restricted filing in order to collect spousal benefits while allowing your own benefit to grow. Familiarity with Restricted Filing Total: Very/Somewhat Familiar (21%) Very familiar Somewhat familiar Not very familiar Never heard of it 27% Very/Somewhat Familiar C 8% 4% 3% 19% 13% 9% C 16% 19% 24% 22% 27% 47% 58% 64% Future Retirees () Recent Retirees (B) 10+ Retirees (C) dded in 2018 Base: Qualified Respondents (Total n=1013); Future (n=339); Recent (n=339); 10+ (n=335) Q7400. How familiar are you with the strategy of restricted filing in order to collect spousal benefits while allowing your own benefits to grow? 41

43 Few adults (born in 1953 or earlier) who are familiar with restricted filing have had discussion with a F about it Only one in ten Current Retirees born in 1953 or earlier have had these discussions. mong those born in 1953 or earlier Discussion with a Professional Financial dvisor about Restricted Filing Total Retirees 13% yes 10% yes 87% no 90% no dded in 2018 Base: t Least Somewhat Familiar with Restricted Filing and born in 1953 or Earlier (Total n=144); Future (n=44*); Recent (n=44*); 10+ (n=56*) Q7405. Have you talked to a professional financial advisor about restricted filing? 42

44 Few older adults have formal written retirement plans Less than one in five Future (18%), Recent (13%), and 10+ (14%) Retirees have a formal written retirement plan. Formal Written Retirement Plans Total: Yes (15%) Future Retirees () Recent Retirees (B) 10+ Retirees (C) 18% Yes 13% Yes 14% Yes dded in 2018 Base: Qualified Respondents (Total n=1013); Future (n=339); Recent (n=339); 10+ (n=335) Q7410. Do you have a formal written retirement plan? 43

45 majority of older adults think the next recession will hit the U.S. within the next 5 years 10+ Retirees are more likely than Future Retirees to feel that the next recession will hit the U.S months from now. Timing of the Next Recession Total: Within the next 2 years (51%) Within the next 5 years (79%) Future Retirees () Recent Retirees (B) 10+ Retirees (C) 22% 32% 30% 29% 27% 25% 25% 24% 22% 18% 14% 14% 6% 7% 5% Within the next 6 months 6-12 months from now 1-2 years from now 3-5 years from now 6 or more years from now dded in 2018 Base: Qualified Respondents (Total n=1,013): Future (n=339); Recent (n=339); 10+ (n=335) Q900. When do you think the next recession will hit the U.S.? 44

46 Future Retirees most confident in their investment portfolio surviving a market downturn Two in five Recent (40%) and 10+ (41%) Retirees say they do not have an investment portfolio. Confidence in Investment Portfolio Surviving a Market Downturn 62% Very confident/ Confident 20% Somewhat/ Not at all confident BC 15% 14% 20% 47% 15% 5% 18% BC C 47% 48% 33% 29% 10% 14% 7% 11% 4% 4% 40% 41% Very confident Confident Somewhat confident Not at all confident I do not have an investment portfolio Future Retirees () Recent Retirees (B) 10+ Retirees (C) dded in 2018 Base: Qualified Respondents (Total n=1,013): Future (n=339); Recent (n=339); 10+ (n=335) Q930. How confident are you that your investment portfolio will survive a market downturn? 45

47 Future Retirees the most confident in investing outside U.S. Borders However, very few Future (5%), Recent (5%), or 10+ (3%) Retirees are very confident in investing outside U.S. borders. Confidence in Investing Outside U.S. Borders 35% Very confident/ Confident 65% Not very/ Not at all confident BC 5% 5% 3% 30% 26% 38% B 24% 19% 25% 22% 27% 23% 76% 75% 49% 53% Very confident Confident Somewhat confident Not at all confident Future Retirees () Recent Retirees (B) 10+ Retirees (C) dded in 2018 Base: Qualified Respondents (Total n=1,013): Future (n=339); Recent (n=339); 10+ (n=335) Q935. How comfortable are you investing outside of U.S. borders (i.e., in international stocks/mutual funds, etc.)? 46

48 Future Retirees see market recession as greatest challenge to meeting investment goals while others cite US political climate However, about a third of Recent (31%) and 10+ (34%) Retirees don t see any challenges to meeting their investment goals Greatest Challenge to Meeting Investment Goals in the Next 5 Years Future Retirees () Recent Retirees (B) 10+ Retirees (C) In 2018, Future Retirees are less likely than in 2014 to say they will have a pension (36% vs. 48%) dded in 2018 Market recession U.S. political climate Inflation Geopolitical events Other, please specify I don't see any challenges to meeting my investment goals Base: Qualified Respondents (Total n=1,013): Future (n=339); Recent (n=339); 10+ (n=335) Q940. Over the next five years, which of the following do you see as the greatest challenge to meeting your investment goals? Tax reform 25% 14% 12% 21% 25% 23% 16% 13% 12% 10% 8% 7% 8% 4% 6% 4% 5% 6% 16% BC 31% 34% Sees challenges to meeting investment goals (NET): Future Retirees 84% Recent Retirees 69% 10+ Retirees 66% 47

49 Disclaimers This material is not a recommendation to buy, sell, hold, or rollover any asset, adopt an investment strategy, retain a specific investment manager or use a particular account type. It does not take into account the specific investment objectives, tax and financial condition or particular needs of any specific person. Investors should work with their financial professional to discuss their specific situation. This information is general in nature and is not intended to be tax, legal, accounting or other professional advice. The information provided is based on current laws, which are subject to change at any time and has not been endorsed by any government agency. Nationwide Investment Services Corporation (NISC), member FINR, Columbus, OH. Nationwide Retirement Institute is a division of NISC. Nationwide, the Nationwide N and Eagle, Nationwide is on your side and Nationwide Retirement Institute are service marks of Nationwide Mutual Insurance Company Nationwide 48