2/3 Of Near-Retirees Failed Or Barely Passed A Basic Social Security Quiz
SPRINGFIELD, Mass.--(BUSINESS WIRE)--
Over 15,000 new people are added to the Social Security benefits payment pool every day, according to the Social Security Administration. The latest Social Security retirement benefits quiz of near-retirees from Massachusetts Mutual Life Insurance Company (MassMutual) exposes opportunity for better understanding of some basic Social Security facts and planning. In fact, two-thirds of near retirees barely passed or failed the latest quiz.
“Now’s the time for retirees to take action,” said Mike Fanning, he/him, head of MassMutual US. “Headwinds facing retirees today are plentiful: Inflation. Market volatility. The extra Medicare cost added to Part B and Part D premiums 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.”
Here are some highlights from MassMutual’s quiz that near-retirees should know and plan for:
When asked if their retirement income plans account for inflation and market volatility, only 17% said YES while 28% said NO, 28% said I HOPE SO and 26% said I HAVE NO IDEA.
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, still 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 earning 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.
While this topic was not part of the latest quiz, another crucial Social Security benefit that parents and legal guardians of a dependent adult child with a disability should be aware of is that when the parents 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.
“It’s more important now than ever to know the basic facts and to secure more guarantees in retirement,” said Paul LaPiana, he/him, CFP, head of product with MassMutual. “For example, consider having your retirement income in diversified buckets, some guaranteed and some market dependent. Think about Roth IRAs, Roth 401(k) plan contributions, whole life insurance and annuities.”
An online poll commissioned by MassMutual was conducted by PSB Research from April 4 to 7, 2022 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 of near-retirees about Social Security retirement benefits in 2015, 62% of those age 50+ failed. In 2018, 47% failed. In 2020, 33% failed. In 2021, 35% failed. And in 2022, 29% failed.
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.