Almost 70% of near-retirees either failed or barely passed MassMutual’s latest Social Security retirement benefits quiz. Over one-third failed (35%), and another one-third received a D (34%).
More than a quarter of near-retiree respondents did not know that if they have a spouse, the other spouse can receive benefits even if the spouse has no individual earning history.
More than one-third 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.
And 44% did not 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.
“One of the most concerning findings was that 43% of near-retirees do not know what percentage of their income in retirement will be coming from Social Security benefits,” Paul LaPiana, head of product with MassMutual, said in a statement, continuing, “Knowing your total retirement income and where it will come from is part of the foundation of retirement planning.”
Other highlights (or lowlights) include:
1. The majority (84%) know their benefits will be reduced if they take benefits before full retirement. Fewer (77%) know that if they receive benefits before their full retirement age and continue to work, their benefits may be reduced based on how much they make.
2. Two out of five plan to rely on Social Security as their largest source of income in retirement, despite the possibility that benefits could be reduced by 2035. Just over one-half are aware that Social Security benefits could be reduced by 2035.
3. Over one quarter believe that their income can sustain them 10 or fewer years in retirement. Less than half (42%) believe their income can support them 21 years or more. More than a quarter of near-retirees do not know how much money, in addition to Social Security benefits, they will need to retire.
4. More than one-quarter believe their retirement income plans account for inflation and market volatility. Just under one quarter feel they are not at all exposed to stock market fluctuations in retirement.
5. Just under one quarter have documented their financial information and online usernames and passwords in one place as part of their estate plans. Nearly one quarter have not and never plan to.
“There are two key things to remember when it comes to retirement: Knowledge is power, and planning is powerful,” LaPiana concluded. “For those nearing retirement, the questions you need to ask yourself are, ‘Where is my income going to come from, and what do I need to do to ensure that I do not leave anything on the table?’ With Social Security and all of your other retirement income streams, know the nuances. Carefully plan. And make decisions on purpose and not by accident.”