Despite Social Security being the backbone of most Americans' retirement, we have a tremendous lack of basic knowledge about the program and its benefits, according to a MassMutual survey of more than 1,500 respondents. About 72 percent failed a true/false quiz about basic Social Security facts -- including not even knowing the age they need to be to collect full retirement benefits.
The survey data reveals that perhaps the greatest Social Security deficit in this country is the lack of education around the retirement benefits of the program, noted a MassMutual press release on the survey. Yet nearly one-third of retirees receive almost all of their retirement income from the system and nearly two-thirds receive more than half of their retirement income from Social Security.
The MassMutual survey found that only eight percent of Americans consider themselves very knowledgeable about Social Security. And that perception mirrors reality: Only one respondent out of 1,513 answered all the questions correctly.
Michael R. Fanning Executive Vice President, U.S. Insurance Group, MassMutual had this analogy for The Huffington Post: “Nobody would take a long drive for a summer weekend getaway without first checking that they had enough gas and maybe taking a look under the hood to check the oil, yet as Americans prepare for the ‘get away’ of retirement -– and retirements are lasting an average of 30 years -– an alarming few even know where to look when it comes to checking the ‘gas gauge’ on their Social Security benefits.”
What were some of the biggest misconceptions:
1. Citizenship is a requirement.
Three-quarters of survey respondents thought citizenship was necessary to receive Social Security retirement benefits. It is not.
2. Retirement age is 65 for everyone.
More than 7 in 10 -- 71 percent -- of the respondents believed that full retirement age is 65. It is not. It varies depending on your birth year.
3. You can continue to work without penalty if you begin collecting retirement benefits early.
Benefits are offset by earnings until you reach 66. If you’re younger than full retirement age during all of 2015, Social Security will deduct $1 from your benefits for each $2 you earn above $15,720. More than half of those surveyed (55 percent) incorrectly believe that they can continue working while collecting full Social Security retirement benefits regardless of their age.
Want to know more? You can try the quiz here.