The American College of Financial Services surveyed 245 financial advisors with the Retirement Income Certified Professional® (RICP®) designation regarding the financial future of Social Security and how that affects their clients.
Below are the key takeaways:
- Two thirds (67%) of RICP®-holding financial advisors with older clients say their clients are moderately worried that the Social Security program will drastically cut benefits in the future.
- Nearly half of financial advisors (46%) are worried about the Social Security program drastically cutting their older clients’ benefits.
- Yet more than half (54%) of financial advisors say they are not worried about the Social Security program drastically cutting their older clients’ benefits in the future.
- More than 8 in 10 (84%) of RICP®-holding financial advisors with older clients say cutting Social Security benefits by 20% today would drastically alter their clients’ lifestyles.
Retirement Center professors provide commentary on the survey results:
“This survey reveals an important opportunity for advisors to work with their clients. Opinions vary greatly among both consumers and their advisors, but the responses tell us two things. First, Social Security is a very important benefit for older clients and second, there is concern about what will happen if the Social Security program experiences cuts. These concerns indicate that advisors need to monitor the political landscape to ascertain whether Social Security benefits may be reduced in the future, and they need to work with their clients now to have plans in case cuts indeed occur.“ – Steve Parrish, Co-director of The American College New York Life Center for Retirement Income.
“This survey reveals that RICP® advisors believe that Social Security is still a good investment. On average 81% of advisors’ clients are taking Social Security after age 65 with only 9% of their clients taking it the earliest age. This is drastically different from the national average with 35% of men and 40% of women claiming their benefits at the age of 62. Only some advisors and consumers are concerned as to whether Social Security would cut benefits, however, most advisors (84%) agree that even a cut of 20% in Social Security benefits would drastically alter their client’s lifestyle. The survey also asks an open-ended question about client misconceptions around Social Security. The vast majority of the misconceptions fall into one of four categories: spousal benefits, when you have to start taking Social Security, the cost-of-living adjustment, and taxation.” - Colin Slabach, Assistant Director, The American College New York Life Center for Retirement Income