The Finance of Longevity

Into The Great Unprepared

Retirement in the age of social-insecurity

by Tina Ambrozy

Ms. Ambrozy is president of sales and distribution for Nationwide. Visit

Financial advisors share a noble purpose of helping people prepare for a secure and happy retirement. But it seems they have their work cut out for them. Too many of America’s workers have a negative outlook on what their retirement is going to be like and too few work with a financial advisor.

Of the 1,012 Americans age 50 or older surveyed in this year’s Nationwide Retirement Institute® survey, only 21 percent of those nearing retirement think life will be better in retirement. And of those recently retired, 28 percent say life is worse, citing income (78 percent) and cost of living (76 percent).

Their biggest concerns are health care costs and having enough retirement income. Our survey uncovers the importance of considering maximizing Social Security benefits to better prepare for planned – and unplanned – expenses in retirement.

Concerns about Social Security

Almost 4 in 5 of future retirees said they are worried about Social Security running out of money during their lifetime. And about half of current and future retirees believe the current administration will cut Social Security benefits.

That’s the highest percentage we have seen since we started this survey four years ago. Of the 29 percent of future retirees who said they plan to claim Social Security benefits early, many cited concerns that benefits might be reduced due to Social Security reforms.

There is reason for concern, but most likely, Social Security is not going away any time soon. Social Security receives 77 percent of its funding through current payroll taxes. However, according to the latest Trustees Report, Social Security is facing a sizable revenue shortfall. If nothing is done, the shortfall will result in a 23 percent cut to benefits as early as 2034.
In addition, the average American couple claiming Social Security could spend about 64 percent of their monthly benefits on health care costs1 – and these expenses keep about a quarter of retirees from living the retirement they expected.

Together, unexpected health care costs and reduced benefits make optimizing Social Security more important than ever.

Americans want advice on Social Security

The retirement income landscape, and Social Security, are changing for the next generation of retirees, making careful preparation extremely important. Those who work with an advisor are more prepared and likely than those who don’t to say they can do the things they wanted in retirement.

However, fewer than 1 in 5 older Americans work with a financial advisor who provides guidance on claiming Social Security benefits. And of those that do, about half the time it was the client who initiated the discussion.

Advisors need to make sure they are having these important conversations about Social Security or risk losing those clients to an advisor that will. In fact, nearly 3 in 4 future retirees who work with a financial advisor said they would switch advisors in order to maximize their Social Security benefits.

The reason so many financial advisers don’t bring up Social Security with their clients is because they feel they don’t know enough about the topic. And it’s hard to blame them for feeling that way

Simplifying Social Security for advisors

The reason so many financial advisers don’t bring up Social Security with their clients is because they feel they don’t know enough about the topic. And it’s hard to blame them for feeling that way.

Social Security is undoubtedly one of the most complex retirement topics facing American workers. Even those who can identify the factors that will impact their benefit are likely unable to grasp the thousands of rules that apply to Social Security. The complexity makes it extremely difficult for retirees to maximize their benefit on their own.

To help advisors start conversations with clients about important claiming decisions, Nationwide’s free Social Security 360 Analyzer® provides a comprehensive look at Social Security filing strategies and helps position Social Security in the context of an individual or family’s retirement income needs.

Preparing for retirement holistically by working with advisors and online tools can help retirees overcome challenges posed by lack of savings, planning obstacles, health care costs and other complexities.

With growing uncertainty and looming potential changes, Americans in or nearing retirement need advisors’ help navigating the complexity of the program. When and how Americans file for Social Security is one of the most important financial decisions they will make in their lifetime.◊




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Methodology: The 2017 Social Security Study was conducted online within the U.S. by Harris Poll on behalf of the Nationwide Retirement Institute between May 26 and June 6. Respondents comprised 1,012 U.S. adults aged 50 or older who are either retired or plan to retire in the next 10 years and collecting Social Security or planning to. Data are weighted where necessary by age by gender, race/ethnicity, region, education, household income, retirement status, and propensity to be online to bring them in line with their actual proportions in the population.
About Nationwide
Nationwide, a Fortune 100 company based in Columbus, Ohio, is one of the largest and strongest diversified insurance and financial services organizations in the U.S. and is rated A+ by both A.M. Best and Standard & Poor’s. The company provides a full range of insurance and financial services, including auto, commercial, homeowners, farm and life insurance; public and private sector retirement plans, annuities and mutual funds; banking and mortgages; excess & surplus, specialty and surety; pet, motorcycle and boat insurance. For more information, visit
1 Analysis from the Nationwide Retirement Institute Health Care Costs assessment tool and Social Security 360 analyzer case study, 2017. Assumptions used were: a 62-year-old couple, living in Ohio, with life expectancies of 85 for a male and 88 for a female.
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.
Social Security 360 Analyzer is a service mark of Nationwide Life Insurance Company. Nationwide, the Nationwide N and Eagle, Nationwide is on your side and Nationwide Retirement Institute are service marks of Nationwide Mutual Insurance Company. © 2017 Nationwide