Social Security Education: How Are You Doing?

By David Freitag CLU, ChFC, CRPC
Article provided by Christopher J. Metkiff, RICP®, AIF®

Social Security represents one of the single largest sources of income in the average retiree’s portfolio, according to industry research group LIMRA.

With something this big, it would be important for workers to understand how Social Security works. And with that in mind, MassMutual commissioned a national study of 1,500 Americans who were close to retirement age. The people in this study were between ages 55 and 65 and had not yet filed for their benefits.

The results of this study show that 33 percent of the people interviewed could not pass the 12-question quiz to the right about their benefits. Another 19 percent barely passed with a score of a D. Only 3 percent of those interviewed answered all 12 questions correctly.

MassMutual commissioned a similar study five years ago. By comparison, this 2020 study shows that people are better informed about their benefits than they were in 2015. However, not all that much better.

People contribute 6.2 percent of their earned income (up to the Social Security wage base) into the Social Security program. This payment is matched by their employer. Often, the combined payment for Social Security benefits is higher than contributions to their 401(k) plans. Yet there is still a great lack of knowledge about how this very important program works to their benefit.

Source: LIMRA analysis of U.S. census Bureau’s Current Population Survey, March 2017 Supplement. As cited in the LIMRA Secure Retirement Institute 2018 Retirement Income Reference Guide, Fourth Edition. Analysis based on individual’s retirement status.

So how did you do on the quiz? If you find your knowledge a little lacking, check out this great guide about Social Security and how filing strategies can be used to your best advantage in retirement. It is a great way to tune up your knowledge about Social Security and how it can help fund a successful retirement.

  1. True or False: If I take benefits before my full retirement age, they will be reduced for early filing.
  2. True or False: 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.
  3. True or False: Once I start collecting Social Security, my benefits payments will never change.
  4. True or False: If I have a spouse and he or she passes away, I will receive both my full benefit and my deceased spouse’s full benefit.
  5. True or False: If I have a spouse, he or she can receive benefits from my record even if he or she has no individual earnings record.
  6. True or False: The money that comes out of my paycheck for Social Security goes into a specific account for me and remains there, earning interest, until I begin receiving Social Security benefits.
  7. True or False: Under current Social Security law, full retirement age is 65 no matter when you were born.
  8. True or False: As a divorced person, I might be able to collect Social Security benefits based on my ex-spouse’s earnings history.
  9. True or False: Under current law, Social Security benefits could be reduced for everyone in 2035.
  10. True or False: If I file for retirement benefits and have dependent children age 18 or younger, they also may qualify for Social Security benefits.
  11. True or False: If I delay taking Social Security benefits past the age of 70, I will continue to get delayed retirement credits increase each year I wait.
  12. True or False: I must be a U.S. citizen to collect Social Security retirement benefits.

Answers: 1 True, 2 True, 3 False, 4 False, 5 True, 6 False, 7 False, 8 True, 9 True, 10 True, 11 False, 12 False

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