Nearly 80% of people nearing retirement don't have a basic knowledge of Social security retirement benefits, according to a recent report by MassMutual.
In its annual Social Security retirement benefits quiz, the life insurance company found that, while that is an improvement from years past, the results are still less than stellar.
For the report, Mass Mutual polled 1,500 Americans nearing retirement (age 55-65) who have not filed for Social Security retirement benefits. The company asked a number of questions and posed 13 true/false statements including some about spousal benefits, retirement age and taxes.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Here's how respondents scored:
- F — 41%
- D — 37%
- C — 13%
- B — 7%
- A+ — Less than 1%
On the positive side, most people (92%) answered correctly (true) to the statement: In most cases, if I take benefits before my full retirement age, they will be reduced for early filing. Some 84% responded correctly (true) to: If I am receiving benefits before my full retirement age and continue to work, my benefits might be reduced based on how much I make.
But at the other end of the spectrum, just 23% of respondents knew this statement to be false: I must be a U.S. citizen to collect Social Security retirement benefits. And only 38% knew that Social Security retirement benefits are subject to income tax just like withdrawals from a traditional IRA account.
As far as retirement paperwork is concerned, the numbers remain pretty low there as well. Just 35% of people said they have a will in place, while 25% said they have a financial durable power of attorney.
Paul LaPiana, CFP, head of brand, product and affiliated distribution with MassMutual, said that while the results are grim, spreading awareness about these topics can help better prepare those nearing retirement for the future.
“The good news is that these individuals have not yet filed for Social Security benefits so they have time to understand the basic facts that can either help or hurt their financial situations in retirement,” he said. “And for those nearing retirement that have not gotten their estate planning documents in place yet, I urge them to make this a priority.”
Social security fundamentals
If you're not sure on the answers to some of these retirement questions, clearly you're not alone. But, as Kiplinger previously reported, there are some Social Security basics — 12 essential details you must know about claiming your benefits as you approach retirement age.
The first is finding out your full social security age, or the age that you're entitled to 100% of your benefits. You also should be aware of the number of credits you need to accrue throughout your career to be eligible for social security.
Securing your social security
There are many questions as of late as to the solvency of social security. Recently confirmed Social Security Administration (SSA) Commissioner Martin O'Malley has committed to overhauling the agency, promising shorter wait times and easier-to-use systems.
Last November, SSA chief actuary Steve Goss also aimed to assure the American public that their social security benefits will in fact be available to them when they are ready to use them.
“People should not worry about the trust fund running out of money, as is sometimes said, and (SSA) having an inability to pay any benefits,” Gross said. The likely "worst-case scenario," he said, is that the trust fund will be able to pay only about 80 percent of a beneficiary's benefit by 2034, he said.
That is providing that Congress does not act before then to deal with the issue.
To learn more about Social Security and how it works, you can visit the government's website USA.gov.
RELATED CONTENT
-
What Services Are Open During the Government Shutdown?The Kiplinger Letter As the shutdown drags on, many basic federal services will increasingly be affected.
-
From Camping to Boating: Here's How to Stay Connected Off-GridThere's nothing quite like the peace of off-road adventures. However, ensure you have a stable connection in case you need it.
-
I'm 52, make $210K a year and heard I may lose a 401(k) tax break in 2026. Should I max out my 401(k) anyway?We asked financial experts for advice.
-
Ten Ways Family Offices Can Build Resilience in a Volatile WorldFamily offices are shifting their global investment priorities and goals in the face of uncertainty, volatile markets and the influence of younger generations.
-
Social Security Payment Schedule for 2026Find out when you can expect your 2026 Social Security payments and the date you get paid when your scheduled day falls on a holiday.
-
Ready to File? Test Your Social Security Application IQQuiz Test your basic knowledge of filing for Social Security benefits in our 10 question quick quiz.
-
The 10 Most Costly Social Security Mistakes to AvoidWant to maximize your Social Security check? Learn the 10 most common Social Security filing errors and the steps you need to take to boost your guaranteed retirement income.
-
Dave Ramsey Tells Us the Biggest Retirement Mistake You Can MakeThe talk-show host, author and podcaster tells Kiplinger what people can do to ensure a happy retirement.
-
I'm a Wealth Adviser: These Are the Pros and Cons of Alternative Investments in Workplace Retirement AccountsWhile alternatives offer diversification and higher potential returns, including them in your workplace retirement plan would require careful consideration.
-
I Have to Take a $22,000 RMD by the End of the Year, and I Don't Need the Money. What Should I Do With It?We ask financial experts for advice.
