12 reasons retirees draw Social Security early

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One of the most common pieces of advice people hear from their financial advisors is to put off claiming Social Security benefits as long as possible. Put simply, the longer you wait, the higher the dollar figure on the Social Security check that will arrive in your mailbox. If you were born after 1943 and you delay retirement after your "full retirement age" of 66, your annual rate of benefit will continue to increase by 8 percent, according to the Social Security Administration. Conversely, drawing Social Security early, from age 62 through the full retirement age of 65 to 67, depending on the year you were born, will result in reduced benefits. It may seem like a no-brainer to wait, but not all retirees have that choice.

The recent Nationwide Retirement Institute Consumer Social Security Study (click here to download), conducted this June, revealed a dozen of the most common reasons American retirees need to draw Social Security benefits early. The poll queried both recent retirees and those retired for a decade or more, referred to as "10+ retirees." (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.) CNBC.com shares the study results in the following slides.

By CNBC's Kenneth Kiesnoski
Posted 6 July 2015

No. 12: Pension reduced — 1%
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One of the least common reasons retirees drew Social Security early was to make up for a reduced pension, the study found. One percent of longtime retirees who stopped working more than a decade ago cited it, compared to no recent retirees. That may be because the classic company pension program was much less common by the time younger retirement-aged Americans started working.

Source: Nationwide Retirement Institute Consumer Social Security Study, June 2016

No. 11: Became disabled — 1%
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Just 1 percent of 10+ retirees cited disability as a reason to claim Social Security early, compared to 0 percent of recent retirees.

Source: Nationwide Retirement Institute Consumer Social Security Study, June 2016

No. 10: Building a home — 2%
Contractors build wood framing for a house under construction in Louisville, Kentucky.
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Two percent of overall retirees named home-building expenses as a reason to draw Social Security early, but it's only 10+ retirees who did so. Four percent of them cited this need, compared to zero recent retirees.

Source: Nationwide Retirement Institute Consumer Social Security Study, June 2016

No. 9: Spouse has health issues — 2%
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Equal numbers of recent and 10+ retirees pointed to spousal health issues as a reason to claim Social Security early.

Source: Nationwide Retirement Institute Consumer Social Security Study, June 2016

No. 8: Looking for work — 1%
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Four percent of recent retirees polled said they drew Social Security early while looking for work or a better-paying job, while no 10+ retirees did so, resulting in a 1 percent overall result (given the study's weighting of replies). That makes sense from an age perspective, with younger retirees still willing and (physically) able enough to seek continued employed.

Source: Nationwide Retirement Institute Consumer Social Security Study, June 2016

No. 7: No other income — 18%
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Nearly a fifth of all retirees polled said they had no other income, so they drew Social Security early. The percentage was higher among 10+ retirees, at 21 percent. Only 11 percent of recent retirees — who are more likely to still be working and/or earning in some capacity — said the same.

Source: Nationwide Retirement Institute Consumer Social Security Study, June 2016

No. 6: Saving money — 7%
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At about halfway through this list, 7 percent of retirees overall said they drew Social Security early to start saving sooner. Greater numbers of the more numerous recent retirees (12 percent) than the less numerous 10+ retirees (5 percent) said so, pushing this reason up to the No. 6 spot on the list.

Source: Nationwide Retirement Institute Consumer Social Security Study, June 2016

No. 5: Developed health problems — 15%
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Personal health problems were named by 15 percent of overall retiree study respondents. Perhaps surprisingly, more recent retirees (20 percent) cited this issue than older, 10+ retirees (13 percent).

Source: Nationwide Retirement Institute Consumer Social Security Study, June 2016

No. 4: Laid off or unemployed — 17%
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Overall, 17 percent of retirees pointed to being laid off or rendered unemployed as a reason to draw benefits early. That averages out from 21 percent of recent retirees and 15 percent of 10+ retirees.

Source: Nationwide Retirement Institute Consumer Social Security Study, June 2016

No. 3: Retired earlier than expected — 27%
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The third most likely reason retirees draw Social Security benefits early is an earlier-than-expected retirement, the study found. Overall, 27 percent of retirees cited this cause, representing 22 percent of recent retirees and 30 percent of 10+ retirees.

Source: Nationwide Retirement Institute Consumer Social Security Study, June 2016

No. 2: To supplement income — 46%
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The second most common reason retirees had to draw Social Security early was the need to supplement income, cited by an average of 46 percent of those surveyed. This reason was No. 1, however, with longtime retirees who stopped working a decade or more ago (48 percent), compared to the recently retired (41 percent).

Source: Nationwide Retirement Institute Consumer Social Security Study, June 2016

No. 1: To pay living expenses— 51%
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Overall, just over half (51 percent) of retirees named paying living expenses as the top reason they had to draw on Social Security earlier than expected. More recent retirees, some 68 percent, told pollsters that was the case, while 43 percent of those retired 10 years or more stated this as the reason.

Source: Nationwide Retirement Institute Consumer Social Security Study, June 2016

Correction:
This story has been updated to reflect that for those born between 1943 and 1954, full retirement age is 66.

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