Most people flunked a 10-question survey on Social Security commissioned by MassMutual.
Only 28% of Americans received a passing grade when asked basic questions about Social Security, and only 8% said they are very knowledgeable about Social Security.
Three-quarters of the respondents said that being an American citizen is necessary to receive Social Security benefits, which is not the case. More than seven in 10 (71%) believe that the full Social Security retirement age is 65, when it actually depends on one’s birth year, and 55% incorrectly believe that they can receive full Social Security retirement benefits while continuing to work.
Nearly two in three (63%) believe Social Security will be available when they retire, but 45% think the program will be underfunded by the time they retire, which may be why only 39% expect to rely more on Social Security than their personal savings.
The survey asks people if they will continue to receive both their own and their spouse’s benefit if their spouse dies. The answer is that they can only receive both benefits when both spouses are alive; in the event of a death, they will receive whichever is the greater amount. The survey also asks whether a person receiving Social Security who has dependent children or grandchildren may receive benefits for those children, and the answer is yes. The survey also asks whether, once a person starts collecting Social Security benefits, those benefits will never change; the Social Security Administration calculates cost of living adjustments (COLA) every year, so there is a chance payments will increase.
The survey reveals that government workers who also have a pension may have their Social Security payments reduced, and their spouse may possibly not receive any Social Security payments. Finally, the survey reveals that a spouse who has no earnings history or who leaves the workforce for a long period of time may receive 50% of the higher earning spouse’s full retirement benefit.
“Perhaps the greatest Social Security deficit in this country is the lack of education around the retirement benefits of the program, which presents an opportunity and responsibility to financial professionals,” says Michael R. Fanning, executive vice president in the U.S. insurance group at MassMutual. “With millions of Americans nearing retirement each year, many may be at risk of underutilizing a critical component of their retirement income stream.”
Phil Mchalowski, vice president, U.S. insurance group at
Mass Mutual, adds: “Americans who lack the proper knowledge and information
about Social Security may be putting their retirement planning in jeopardy. In
fact, many may be leaving Social Security retirement benefits they’re entitled
to on the table, or incorrectly assuming what benefits may be available in
KRC Research conducted the survey for MassMutual among 1,513 Americans between February 26 and March 2. Additional results are reported here.