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 You should ace it. After all, Social Security is the most important
retirement benefit for most Americans, and understanding the rules
is critical for getting the most out of the program.
So here we go with a few questions:
1. At what age can you receive your full benefit?
2. Can you keep working while collecting a full benefit?
3. If you are divorced, can you collect a benefit based on your
ex-spouse's earning history?
4. Can you receive a benefit even if you are not a U.S. citizen?
Only 28 percent of Americans can give enough correct answers to
questions like these to get a passing grade, according to a new
survey by Massachusetts Mutual Life Insurance Co.
Just one in 1,500 respondents correctly answered all 12 questions,
and only 38 percent got more than half of the answers right.
The findings are disturbing. Ninety percent of Americans over age 65
receive Social Security benefits, and, for 65 percent, the program
provides more than half of total income, according to the National
Academy of Social Insurance. For 36 percent, Social Security is the
entire retirement income ballgame.
"We didn't expect everyone to get a 100 percent score, but what
shocked us was that only 28 percent got a passing grade,” said
Michael R. Fanning, executive vice president of MassMutual’s U.S.
Insurance Group.
The silver lining is that the retirement industry has ramped up
efforts to educate workers about Social Security. Information and
tools about benefits are cropping up in many workplace 401(k) plans,
and much media coverage of the program has shifted of late away from
political rants to useful information.
So how did you do? Here are the answers:
FULL BENEFIT AGE
Most people got this wrong. Some 71 percent of respondents think 65
is still the full retirement age for Social Security. But it is 66
for today's retirees and will be 67 for people retiring in 2022.
Only 57 percent of respondents were aware that the timing of their
claim affects the monthly benefit amount.
WORKING WHILE RECEIVING BENEFITS
Slightly more than half missed this one, believing people can
continue to work while collecting a full Social Security retirement
benefit. But that is true only if you have reached your full
retirement age.
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This year, an early Social Security filer with income of more than
$15,720 from work (employment or self-employment) will pay a
penalty. One dollar will be deducted from benefit payments for every
$2 earned above that limit.
COLLECT FROM AN EX-SPOUSE
Just 45 percent think that it is possible to claim a benefit on the
record of an ex-spouse. They are correct, and it does not matter if
that ex-spouse has remarried.
This can boost benefits dramatically, since spousal and survivor
benefits are among the most valuable features of Social Security.
You can claim half of an ex-spouse's benefit if you are at full
retirement age (currently 66), had been married for at least 10
years, and if that benefit works out to be higher than your own. You
are entitled to 100 percent of a deceased ex-spouse's benefit.
CITIZENSHIP
Three-quarters of survey respondents think that being an American
citizen is necessary to receive Social Security retirement benefits.
But the main eligibility requirement to receive benefits is paying
into the system.
You must have contributed payroll taxes for a cumulative total of at
least 40 quarters (10 years). Along with citizens, individuals who
are "lawfully present" in the United States, including permanent
residents, refugees and asylum seekers, are eligible for benefits.
(Editing by Beth Pinsker and Lisa Von Ahn)
(The writer is a Reuters columnist. The opinions expressed are his
own.)
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