States could help future retirees get more cash from Social Security

  • CNBC | by: Sarah O'Brien |
  • 03/22/2018
State-run retirement programs that automatically enroll private workers could help future retirees maximize their Social Security benefits, a new study suggests.

Based on projected account balances in 2050, 39 percent of participants in such auto-enrollment strategies would have enough to delay claiming Social Security by a year or more even at low contribution levels, according to research released Wednesday by the Pew Charitable Trusts.

For every year a person puts off claiming benefits, their monthly payment jumps by about 8 percent.

"Some people have questioned whether these accounts will make a difference, but these findings show they could have a big impact for both higher- and lower-income earners," said Alison Shelton, a senior research officer on Pew's retirement savings team.

The research, done with help from the Social Security Administration, assumed an average contribution rate of 3 percent of a worker's income. For about a fifth of all account holders, their balances would be enough in 2050 to provide income equivalent to their Social Security benefit for at least two years, based on current formulas.

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