November 12, 2015

CFPB: “Planning for Retirement” Tool Released to Help Consumers Decide When To Claim Social Security

CFPB Report Shows Many Consumers Base Critical Claiming Decision on Limited Information

WASHINGTON, D.C. – Today the Consumer Financial Protection Bureau (CFPB) released “Planning for Retirement,” an interactive, online tool designed to help consumers decide when to claim their Social Security retirement benefits. According to a report released by the CFPB, many older Americans are relying on Social Security for more of their income for a longer period of time, but end up receiving lower monthly benefits by claiming early. Often, the claiming-age decision is based on limited information about the financial impact of that choice. The new CFPB tool allows consumers to estimate how much money they can expect to receive at different ages and provides tips to help consumers evaluate the trade-offs.

“Millions of Americans are likely to face financial insecurity in their retirement years,” said CFPB Director Richard Cordray. “Deciding when to start claiming Social Security benefits is one of the most important financial choices a consumer will make. The CFPB’s ‘Planning for Retirement’ tool can help consumers clearly see their options.”

The “Planning for Retirement” tool can be found at:https://www.consumerfinance.gov/retirement/

Americans are eligible to claim Social Security retirement benefits without any reduction at their “full retirement age,” according to the Social Security Administration. For people born after 1942, full retirement age ranges from 66 to 67, depending on the year the person was born. Consumers can also claim their benefits several years before, agreeing to take less money each month. Or they can claim several years after, and get bigger monthly checks. Generally, the amount a consumer receives from Social Security is a one-time choice. This means if a consumer claims the reduced or increased benefit, they receive that amount for the rest of their life, with annual cost-of-living adjustments. This decision also impacts the benefits an older consumer’s surviving spouse will receive after their death.

Today, the CFPB released a report indicating that many consumers may not be taking advantage of their option to receive higher Social Security income and a more secure retirement. Specifically, the report highlights:

Today’s CFPB report about Social Security can be found at:https://files.consumerfinance.gov/f/201511_cfpb_issue-brief-social-security-claiming-age-and-retirement-security.pdf 

Planning for Retirement

Retirement is an increasingly complex process with multiple decision points. Choosing when to claim Social Security requires consideration of longevity, inflation, current savings, interest rates, as well as planning and budgeting. The CFPB has worked closely with the Social Security Administration to offer the “Planning for Retirement” tool, an unbiased, trusted source of information. Consumers can use the tool, which is also available in Spanish, with the confidence that they are getting impartial information. Benefits of the interactive tool include:

The CFPB’s Office for Older Americans was specifically tasked under the Dodd-Frank Wall Street Reform and Consumer Protection Act to help consumers make sound financial decisions as they age. More information about the CFPB’s work on behalf of older Americans can be found at: https://www.consumerfinance.gov/older-americans

The Spanish version of the “Planning for Retirement” tool can be found at:
https://www.consumerfinance.gov/jubilacion 

The Social Security Administration’s website shows a consumer’s actual earnings record. To view or open an account, go to:https://www.socialsecurity.gov/myaccount

This post was originally published here.