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hij abc How much will I get? Securian’s study of baby boomers’ Social Security strategies Social Security benefits and how to claim them is becoming February 2013 a prominent topic in the national discussion about baby boomers’ financial retirement readiness. It doesn’t take much searching to find articles that describe strategies for maximizing Social Security, perhaps because of the devastation of millions of boomer nest eggs during the Great Recession. Securian Financial Group wanted to find out if boomers now see Social Security as a strategic element of retirement income planning. Securian commissioned an online study of 804 consumers aged 50-65 to learn the extent of Social Security’s role in boomers’ retirement income planning. Specific areas of interest included: • whether pre-retirees have explored their options for claiming Social Security; • whether they have developed plans for claiming Social Security; • whether they changed their Social Security plans in light of recent economic events; • when they began planning or expect to begin planning; • factors that prompted them to plan.F78685 2-2013

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Key findings: The PlannersThe Securian survey revealed that baby boomers fall into two distinct Figure 1. Planners and Non-plannersgroups of preparedness for claiming Social Security retirement Which of the following best describesbenefits: Planners and Non-planners. Planners are those who have your experience in planning for your SSdeveloped (or are developing) strategies for maximizing their Social retirement benefits?Security benefits. Of the pre-retirees surveyed, 18 percent (147) of 18% of those surveyed are Plannersthem are Planners. [Figure 1]Nearly half of the Planners created or started to create their plans 10.3%between the ages of 60 and 65. The ages of 62, 50 and 55 stand 8.0%out as benchmarks for claiming, with 20 percent, 10 percent and 37.7%10 percent, respectively, starting at those ages.What prompted them to start planning or tweak their plans?The impact of the Great Recession casts a dark shadow over this 44%generation, who had so much to lose and not enough time to regainit before “retirement age,” though that deadline has shifted for manyof them. Half of the Planners started focusing on Social Security Non-plannerswithin the last three years, the most common reason being Concern Beginning to explore options 37.7% Have not started to explore options 44.0%whether retirement savings will provide enough income in retirementwith 44 percent. Need to decide on retirement age was a close Plannerssecond with 42 percent. [Figure 2] Explored options and am developing a plan 8.0% Have a plan in place 10.3% Figure 2. Planners (n=147) What prompted you to begin planning for claiming your SS benefits? Count Percent Concern whether retirement savings will provide enough income 65 44.2% Need to decide on retirement age 62 42.2% My health 45 30.6% Assessing specific cash flow needs in retirement 44 29.9% Uncertainty about future of SS 44 29.9% Advice from already retired friends or family 26 17.7% Health of spouse 16 10.9% Advice from financial advisor/professional 15 10.2% Death of spouse 5 3.4% Nothing specific prompted me 4 2.7% Death of parent 2 1.4%How much will I get? Securian’s study of baby boomers’ Social Security strategies – February 2013 2

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When asked what changes Planners made to their Social Securitystrategies: [Figure 3]• nearly 60 percent said they changed their retirement age;• almost 48 percent said they changed the age they’ll start claiming Social Security benefits;• nearly 40 percent indicated their changes involved their spouse’s retirement age. Figure 4. Planners (n = 147) Figure 3. Planners (n = 147) Based on your plan, do you think you will What changes have you made to your plan? Percent maximize your Social Security benefits? 56% said “NO” or “NOT SURE” Changed age at which I’ll retire 58.9% Changed age at which I’ll begin collecting SS benefits 47.9% Changed how much I spend 41.1% Will work PT in retirement 39.7% 37.4% Changed how I should invest my savings 21.9% Changed age at which my spouse will retire 13.7% 44.2% Changed age at which my spouse will begin collecting SS benefits 13.7% Coordinated dates at which spouse and I will begin collecting SS benefits 12.3% 18.4% Yes 44.2%Even though they’re making plans and perhaps trying to generate a No 18.4%reasonable estimate of the amount of Social Security income they’ll Not sure 37.4%receive in retirement, many Planners are not convinced they’vedeveloped the right strategy. When asked whether they think theywill maximize their benefits, 56 percent said “NO” or “NOT SURE.”[Figure 4]Key findings: The Non-planners Figure 5. Non-Planners (n = 657) At what age do you expect to begin exploringThe large majority (82 percent) of boomers who participated in your options for claiming SS benefits?Securian’s survey are not rushing their decisions about when andhow to claim Social Security. Non-planners are either just beginning % 64% say they’ll startor have not yet started to explore their options. [FIgure 5] 80 planning between the 70 ages of 60 to 65.• 64 percent say they’ll start planning between the ages of 60 to 65. 60• 18 percent say they’ll begin at age 60. 50• 18 percent will start at age 62. 40• 15 percent will start when they’re 65. 30 26.3% 20 10 6.7% 2.8% 0 50-59 60-65 66-69 70-75 Age rangeHow much will I get? Securian’s study of baby boomers’ Social Security strategies – February 2013 3

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One similarity between the Planners and the Non-planners is therelative popularity of the Social Security website as a source ofinformation. [Figure 6] Figure 6. Which of the following sources do you plan to seek advice from when developing a plan for claiming SS benefits? Non-planners Planners SS Website 65.9% 59.9% Local SS office 39.0% 21.8% Already retired friends or family 35.9% 24.5% Online tool/calculator 33.2% 25.2% Financial advisor 26.8% 22.4% Retirement plan provider/employer 21.6% 15.6% Articles in newspapers/publications 14.6% 15.6% Accountant/CPA 14.0% 6.8% None 7.2% 10.9% Attorney 4.3% 3.4%• 66 percent of the Non-planners expect to visit socialsecurity.gov while educating themselves about Social Security. About 60 percent of the Planners use the site.• 39 percent of Non-planners say they will physically go to their local Social Security offices for information. Among the Planners, 22 percent checked this option.• Retired friends and family will be a source for 36 percent of non-planners and 25 percent of Planners.• Financial advisors are considered a source of information about Social Security by 27 percent of Non-planners and 22 percent of Planners.How much will I get? Securian’s study of baby boomers’ Social Security strategies – February 2013 4

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The Non-planners are more pessimistic about the future of SocialSecurity. More than 16 percent of them say they expect to receive noSocial Security benefits. Only four percent of Planners expected toreceive no benefits. Among the more optimistic Non-planners,27 percent estimated that 40 to 59 percent of their retirementincome will be Social Security. [Figure 7] Figure 7. What percentage of your retirement income do you expect to come from Social Security? Non-planners Planners 0%, I am not relying on any income from Social Security. 16.6% 4.1% Don’t know N/A 37.4% < 20% of retirement income 6.9% 8.2% 20%-39% of retirement income 24.1% 15.0% 40%-59% of retirement income 27.4% 17.7% 60%-69% of retirement income 3.7% 0.0% 70%-89% of retirement income 10.7% 8.8% > 90% of retirement income 10.7% 8.8%ConclusionConventional wisdom about how and when to claim Social Securitybenefits is to delay it as long as possible to receive more monthlybenefits under the delayed retirement credit: Those born in 1943or later receive eight percent more benefits per year for every yearpast the full retirement age they wait to draw from Social Security.A person whose full retirement age is 66 will receive 32 percentmore per month if she waits until she’s 70 to file her claim. Tosupport herself until then, she’s advised to spend down her personalretirement savings.Let’s say she turns 70 in 2022. At the rate US longevity is rising, shecould easily celebrate her 90th birthday in 2042 in reasonably goodhealth. But, according to an extrapolation from Investor’s BusinessDaily,1 the most recent estimate from the Congressional BudgetOffice indicates the Social Security Trust Fund will have been brokenine years by then, having run out of money in 2031.Given this hypothetical but plausible scenario, the question in somebaby boomers’ minds may not be “How much will I get,” but “WillSocial Security outlive me or will I outlive Social Security?”1 “Social Security Trust Fund Likely to Run out in 2031,” www.investors.com, February 5, 2013 http://bit.ly/XrmmWnHow much will I get? Securian’s study of baby boomers’ Social Security strategies – February 2013 5

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About Securian Financial Group, Inc.Since 1880, Securian Financial Group and its affiliates have provided financial security for individuals and businesses in the form of insurance,investments and retirement plans. Now one of the nation’s largest financial services providers, it is the holding company parent of a group ofcompanies that include Minnesota Life Insurance Company. Securian Financial Group, Inc. Insurance | Investments | Retirementwww.securian.com400 Robert Street North, St. Paul, MN 55101-2098©2013 Securian Financial Group, Inc. All rights reserved.F78685 2-2013 DOFU 2-2013A00545-0213