Data and Research

Social Insecurity: Many Don't Understand Benefits

Many Americans misunderstand how Social Security works, a survey found.

By Rebecca Moore | March 13, 2013
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Nearly three-fourths (72%) say Social Security benefits make up half or more of their retirement income, which exceeds the national average of 65%, reported by the Social Security Administration, according to a study released by the Bankers Life and Casualty Company Center for a Secure Retirement. Twenty-nine percent count on Social Security for 75% or more of their retirement income. One in ten relies on Social Security for all of their retirement income.  

The Longevity Risk and Reward for Middle-Income Americans study, which focused on 500 Americans ages 55 to 75 with an annual household income between $25,000 and $75,000, found one in three (34%) do not understand that delaying when they start to collect Social Security benefits can increase their future benefit amount. In addition, nearly half (47%) incorrectly believe an annual cost-of-living increase to their Social Security benefits is guaranteed, and 36% falsely believe full Social Security benefits start with their 65th birthday.  

The survey found some middle-income Americans are also not paying attention to their individual Social Security statements. One in three (35%) middle-income Americans age 55 and older who are not yet receiving Social Security do not know what their monthly benefit amount will be when they retire.