The Pulse

 What’s Your Social Security I.Q.?

Near-retirees are often in the dark about the basics… like when they can retire

MassMutual’s recent Social Security poll reveals some alarming data about what we know, and don’t know, about this most important event. Visit www.massmutual.com.

SPRINGFIELD, Mass.–(BUSINESS WIRE)–Just over one-third (35%) of near-retirees (age 55 to 65) failed and another 18% earned a grade of D on a basic knowledge quiz about Social Security retirement benefits, while only 3%, received an A+ by answering all 12 true/false statements correctly, according to the latest MassMutual Social Security consumer poll.

 

Even more startling, over a quarter (26%) of individuals age 60 to 65 have no idea of the full retirement age.

There is good news, however, and an improving trend.

A large majority (83%) are very knowledgeable about the consequences of receiving Social Security benefits before reaching their full retirement age. A whopping 94% know that if they take benefits before full retirement age, their benefits will be reduced as a result of filing early while 86% know that if they receive benefits before their 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,” said Paul Lapiana, CFP, head of MassMutual US 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 filing for Social Security to grow delayed retirement credits and receive the largest possible benefit for life.”

During The Pandemic, A Few Social Security Topics Rose To The Top:

  1. Survivor benefits. There was a lot of interest in learning the facts about survivor benefits, with 22% not knowing that it is not true that if a spouse passes away one can receive both their and their spouse’s full benefits.
  2. Divorcee benefits. Many were wondering about the impact of a divorce on Social Security retirement benefits. Nearly one third (30%) did not know that a divorced person might be able to collect Social Security benefits based on an ex-spouse’s earnings history.
  3. Zeros on a Social Security statement. Given the widespread negative impact of the pandemic on businesses and jobs, and increased needs for caregiving of children and aging relatives, some will be coming out of the pandemic with zeros or greatly decreased earnings cited on their Social Security statements (aka: ‘the green line form’). Since retirement benefits are based on the top 35 years of earnings, if 35 or fewer years is all you have to show, this could negatively impact your benefits for life.

“As with most things in life, knowledge is power, and choices should be made on purpose and not by accident,” said David Freitag, a financial planning consultant with MassMutual and long-time Social Security expert. “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.”

 

Graded Scores
Statistical significance: 95%

Score

Grade

Percentage of
Respondents
(n = 1,500)

Answered 0 incorrect

100%

A+

3%

Answered 1 incorrect

92%

A

10%

Answered 2 incorrect

83%

B

17%

Answered 3 incorrect

75%

C

17%

Answered 4 incorrect

67%

D

18%

Answered 5 or more incorrect

58% or lower

F

35%

Percentage of Respondents Who Answered TRUE/FALSE Statements Correctly
Statistical significance: 95%. Ranked by total.

 

Total

55 to 59

60 to 65

n=1500

n=803

n=697

If I take benefits before my full retirement age, they will be reduced for early filing. (TRUE)

94%

94%

94%

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. (TRUE)

86%

85%

87%

Once I start collecting Social Security, my benefit payments will never change. (FALSE)

82%

81%

83%

If I have a spouse, he or she can receive benefits from my record even if he or she has no individual earnings history. (TRUE)

78%

76%

80%

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. (FALSE)

75%

73%

78%

The money that comes out of my pay check for Social Security goes into a specific account for me and remains there, earning interest, until I begin to receive Social Security benefits. (FALSE)

73%

72%

75%

Under current Social Security law, full retirement age is 65 no matter when you were born. (FALSE)

67%

61%

74%

As a divorced person, I might be able to collect Social Security benefits based on my ex-spouse’s earnings history. (TRUE)

66%

62%

70%

Under current law, Social Security benefits could be reduced for everyone in 2035. (TRUE)

64%

66%

63%

If I file for retirement benefits and have dependent children age 18 or younger, they also may qualify for Social Security benefits. (TRUE)

56%

56%

56%

If I delay taking Social Security benefits past the age of 70, I will continue to get delayed retirement credit increases each year I wait (FALSE)

54%

53%

55%

I must be a U.S. citizen to collect Social Security retirement benefits. (FALSE)

31%

29%

34%

 

 

 

Methodology
An online poll of 12 true/false statements was commissioned by MassMutual and conducted by PSB Research from March 1 to 9, 2021 among 1,500 Americans nearing retirement (age 55-65 who have not filed for Social Security retirement benefits).
The first time that MassMutual conducted a very similar consumer poll in 2015, 62% of those age 50+ FAILED. In 2018, 47% FAILED. In 2020, 33% failed.
About MassMutual
MassMutual is a leading mutual life insurance company that is run for the benefit of its members and participating policyowners. Founded in 1851, the company has been continually guided by one consistent purpose: we help people secure their future and protect the ones they love. With a focus on delivering long-term value, MassMutual offers a wide range of protection, accumulation, wealth management and retirement products and services. For more information, visit www.massmutual.com.