| As Social Security reform talks heat up, changes to the retirement age, payroll tax may be on the table | | |  | WED, MAR 08, 2023 | | | | Social Security has been and will remain the most important source of income for most Americans in their retirement years.
This year, on average, some 67 million Americans per month will receive a Social Security benefit, totaling more than $1 trillion in benefits paid. What's more, Social Security remains the main source of income for most of the elderly in this country.
Despite its importance, various studies have concluded that many Americans have little understanding of how much money they will need in retirement and what they can expect from Social Security benefits. Yet, without such information, they might not be able to plan for the future and make adjustments while they are still working, if future needs are projected to exceed retirement income.
A recent study released by the Nationwide Retirement Institute found that most Americans are sorely lacking in knowledge about the most basic functions of Social Security.
Here are five things most Americans don't know about Social Security: - Eligibility age: 39% of respondents don't know the eligible age to receive full benefits.
- Payments: Just more than half of those not already receiving Social Security (51%) don't have a clear sense of how much they will get in Social Security income.
- Spousal/child benefits: 30% don't know that Social Security may offer benefits for spouses and children.
- Inflation protection: 37% incorrectly believe that Social Security benefits are not protected against inflation.
- No adjustments: 45% mistakenly believe that if they claim benefits early, their benefits will go up automatically when reaching full retirement age, or they don't know this is false.
For many people, figuring all this out can be intimidating and confusing.
Let's be clear: You don't have to become an expert in all things Social Security. You don't have to memorize Social Security's Program Operations Manual System – the primary source of information used by Social Security employees to process claims for Social Security benefits – from cover to cover.
However, any type of financial education is a helpful tool in preparing for retirement. This includes understanding Social Security retirement benefits and making the most of retirement income. So, it's well worth your time to gain some working knowledge of those things that could directly affect your Social Security benefit.
For more advice to help you make smart financial decisions, check out CNBC's Financial Advisor Hub and Personal Finance section. | |
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