American recognize that we are l iving longer, and thus will be spending more of our lives in retirement. That's the good news from the new MetLife Retirement Income IQ survey. The bad news is that many people still don't seem fully prepared for how they're going to pay for those extra years.
Take Social Security. A full 45 percent of the respondents said that Social Security would be an important part of their retirement scenario. But only 17 percent knew that by delaying when you begin accepting that retirement benefit by three years, you can add 24 percent to your annual total.
The reason that's so important is because Social Security is guaranteed to last till the end of your life, and it's indexed to inflation. If you can maximize those benefits to where you're receiving, say, $30,000 a year, and you live in retirement for 25 years, with a little inflation adjustment, Social Security can be a nearly million-dollar proposition. That means you should manage it with the care and attention you would put toward any other million-dollar aspect of your portfolio.
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