Data & Research April 7, 2021

Many Near-Retirees Don’t Understand Social Security Benefits

More than one-third failed a basic Social Security quiz administered by MassMutual.

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Thirty-five percent of near-retirees, those between the ages of 55 and 65, failed a basic knowledge quiz about Social Security benefits that MassMutual administered. Another 18% earned a D on the graded quiz, and mere 3% got an A+ by answering all 12 true/false statements correctly.

MassMutual also found that 26% of respondents between the ages of 60 and 65 do not know when their full retirement age is.

On the bright side, however, 83% understand the consequences of taking Social Security benefits before full retirement age, and 94% realize that if they do this, their benefits will be reduced. Another 86% know that if they begin taking their benefits before full retirement age and continue to work, their benefits may be reduced based on how much they make.

“Today, Social Security is the primary guaranteed retirement income stream for Americans, besides pensions and annuities,” says Paul Lapiana, head of MassMutual U.S. product. “For those looking to maximize their retirement income stream, one option is to depend on an annuity to fill the gap and hold off on taking Social Security benefits to grow delayed retirement credits and receive the largest possible benefit for life.”

During the COVID-19 pandemic, people expressed interest in a variety of Social Security topics, including survivor benefits. But even with the increase in interest, 22% thought that if a spouse passes away, a recipient can receive both their and their spouse’s full benefits, which is not true.

Many near-retirees were also wondering about the impact of a divorce on Social Security retirement benefits. Thirty percent didn’t know that a divorced person may be able to collect Social Security benefits based on an ex-spouse’s earnings history.

Another impact of the pandemic is that layoffs, furloughs or pay cuts could negatively Social Security benefits, as they are based on the top 35 years of earnings.

“As with most things in life, knowledge is power, and choices should be made on purpose and not by accident,” says David Freitag, a financial planning consultant with MassMutual. “With Social Security, there are a lot of options to consider. Make the wrong choice, and you will be leaving money on the table—for the rest of your life.”

MassMutual commissioned the survey, which PSB Research conducted between March 1 and March 9 among 1,500 Americans between the ages of 55 and 65 who have not yet filed for Social Security benefits.

Products April 7, 2021

RightBRIDGE Rollover Analysis Integrated With Retirement Learning Center

The partnership gives RightBRIDGE users access to detailed employer-sponsored plan data.

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CapitalROCK, the developer of RightBRIDGE, has announced a partnership with Retirement Learning Center (RLC). It has integrated its RightBRIDGE Rollover Analysis with RLC, giving users access to detailed employer-sponsored plan data.

Brian Hendricks, chief operating officer (COO) of CapitalROCK, calls the integration “an excellent solution for what the current regulatory climate requires. We believe that the RightBRIDGE Rollover Analysis provides the fastest and best documented rollover process on the market. Our partnership with RLC advances that even further by giving our users superior plan data that you can typically only find through hours of exhaustive research.”

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“We view the partnership with CapitalROCK as a natural fit,” adds RLC President John Carl. “Our combined solution goes a long way in satisfying the adviser’s conduct of care requirements and allows them to demonstrate a true mastery of the plan environment prior to recommending a rollover. RLC’s proprietary database of detailed plan snapshots accounts for roughly 85% of Americans participating in their employer’s plan. Given what Reg BI [Regulation Best Interest] as well as the new DOL [Department of Labor] exemption require, the timing for a partnership that combines detailed plan data with thoughtful analysis and documentation seems perfect.”

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