Nearly half of the senior citizens eligible for Social Security payments that begin at age 62 plan to begin drawing down those assets immediately, rather than waiting prudently for the higher payments that top off at age 66 for those born between 1943 and 1954, according to a survey of 600 Americans between the ages of 55 and 69 that Fidelity Investments sponsored.  

Respondents said their primary reasons for going for the money so early was immediate financial needs, healthcare concerns and longevity expectations, with this group saying Social Security will be paying for just about half of their retirement income.


Seventy-seven percent of those who plan to begin drawing down the payments say they will use them for basic living expenses, such as food, utilities and mortgages.


However, only 22% knew exactly how much their check will be, 73% did not have a formal retirement income plan, 54% did not know that they need to file for their benefit three months in advance of the date they wish to start receiving payments, and 31% did not know that Social Security payments are taxable.


Another 12% did not know that working affects Social Security payments, and 72% were unaware that a non-working or lesser-earning spouse could be eligible for up to 50% of their spouse’s Social Security, based on the spouse’s income. Fifty-one percent also did not know that a surviving spouse is eligible for the larger of their two Social Security payments.


“Many Americans who are within one year of beginning to collect their Social Security retirement benefits may be planning to rely too much on it, considering Social Security only funds a little more than one-third, or 37%, or an average retiree’s income,” said Carolyn Clancy, executive vice president with Fidelity Investments Personal and Workplace Investing.


“Social Security-related decisions can be complex, and there can be tradeoffs associated with the various payment strategies,” Clancy added. “But with some basic guidance and a lifetime retirement income plan, individuals may find it easier than they think to make an informed decision and get the most from their benefits.”


Fidelity has set up a website,, to provide people with comprehensive information on Social Security. Fidelity is also hosting seminars, in conjunction with the Social Security Administration, at its investor centers nationwide.

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