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So you think you know everything about Social Security? If so, congratulations – you’re in the minority when it comes to knowing about the nation’s largest pension benefits program – which is currently under threat due to the debt limit dispute in Congress. This week, US Treasury Secretary Janet Yellen said a risk could be that “nearly 50 million seniors could stop receiving Social Security checks for some time.”
See: Social Security cost-of-living adjustments not enough to pay higher costs for older people
Find: Next year’s Social Security checks could get COLA’s biggest increase in 13 years
A new study published by the Nationwide Retirement Institute has found that most Americans are sorely lacking in knowledge about the most basic functions of Social Security. The study was based on a survey conducted by The Harris Poll on behalf of the Nationwide Retirement Institute, part of the Nationwide insurance and financial services company.
“There is no question that Americans of all generations need more social security education,” said Tina Ambrozy, senior vice president of strategic client solutions at Nationwide, in a press release. “Unfortunately, not closing the knowledge gap and correcting some of these misconceptions can have costly repercussions. Financial professionals should help their clients understand this foundation of retirement security in America and plan properly to maximize their Social Security benefits. “
Here are five things most Americans don’t know about Social Security:
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Age of eligibility: two in five respondents (39%) do not know the age of eligibility to receive full benefits
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Payments: just over half of those who do not already benefit from social security (51%) do not have a clear idea of how much they will receive in income from social security.
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Spouse / child benefits: 30% do not know that Social Security can offer benefits for spouses and children
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Inflation protection: more than a third (37%) mistakenly believe that social security benefits are not protected against inflation
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No adjustment: 45% mistakenly think that if they claim benefits early, their benefits will automatically increase when they reach full retirement age, or they don’t know this is wrong.
See: When social security runs out: What the program will look like in 2035
Finding: The Biggest Problems Facing Social Security
The study found that many Americans don’t educate themselves about Social Security because they don’t think it will be there when they’re ready or need to claim their benefits. Seven in ten adults aged 25 and over fear the program will run out of money in their lifetime. This is especially true for millennials (77%) and Generation X (83%). But even 61% of baby boomers worry about the same.
What’s more, nearly half of millennials (47%) believe they “won’t get a dime from the Social Security benefits they’ve earned.”
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This story has been updated with recent remarks by Janet Yellen to the Senate Banking Committee.
This article originally appeared on GOBankingRates.com: 5 Things Most Americans Don’t Know About Social Security
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