Nearly two-thirds of near-retirees either failed or barely passed a recent quiz on Social Security benefits.
‘More than a quarter of respondents (28%) did not know that if they have a spouse, the other spouse can receive benefits …’
While over 15,000 new people are added to the Social Security benefits payment pool every day, according to the Social Security Administration, the quiz from MassMutual found an “opportunity for better understanding of some basic Social Security facts and planning.”
For example, four in 10 (40%) did not know that under current law, Social Security benefits could be reduced by 20% or more for everyone by 2035.
Benefits for married couples, including those in same-sex marriages, also confuse many. More than a quarter of respondents (28%) did not know that if they have a spouse, the other spouse can receive benefits even if the spouse has no individual earnings history. And more than three in 10 (32%) did not know that if they have a spouse and the spouse passes away, the surviving spouse will not receive both their full benefit and their deceased spouse’s full benefit. At least more than half (57%) know that if they get divorced, they might be able to collect Social Security benefits based on their ex-spouse’s Social Security earnings history.
Disability benefits
While this topic was not part of the latest quiz, MassMutual said that parents and legal guardians of a dependent adult child with a disability should be aware that when they retire, the child may be eligible to receive an amount equivalent to approximately 50% of their Social Security retirement benefits—with no impact to the amount they receive.
Furthermore, when parents and legal guardians pass away, the dependent adult child with a disability may be eligible to receive approximately 75%, up to certain limits.
“Now’s the time for retirees to take action,” Mike Fanning, head of MassMutual US, said in a statement. “Headwinds facing retirees today are plentiful: Inflation. Market volatility. The extra Medicare cost added to Part B and Part D premiums is included in Social Security retirement benefits. Potential cuts looming for everyone collecting Social Security retirement benefits by 2035. Discussions about changing the age of taking required distributions. The list grows every day and near-retirees have an opportunity to make a difference now to better prepare them for 10, 20, 30, or more years in retirement.”
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
