SPRINGFIELD, Mass.--(BUSINESS WIRE)--The latest Social Security retirement benefits quiz of near-retirees from MassMutual exposes that too many – 78% -- failed or barely passed. In fact, 37% got a D and 41% failed. This is a slight improvement over 2023, when 47% failed the quiz. Less than 1% received an A+ by answering all 13 true/false statements correctly.
“We have been conducting this quiz with near retirees for the last ten years and with new cohorts nearing retirement each and every year, we see similar patterns of confusion when it comes to Social Security retirement benefits,” said Paul LaPiana, CFP, head of brand, product and affiliated distribution with MassMutual. “What’s more, we are finding that people at this stage of their lives should have some basic estate planning documents in place, and a staggering number do not.”
Other key findings (link to full report):
- More near retirees are knowledgeable about spousal, survivor and divorcee benefits compared to last year, but it is still not enough. Three out of four (75%) answered correctly that if they have a spouse, their spouse can receive benefits from their record even if the spouse has no individual earnings history. Seven out of ten (70%) answered correctly that a surviving spouse does not receive both their full benefit and their spouse’s full benefit in the event their spouse passes away. And 59% 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.
- A surprising 45% of near retirees do not know the current full retirement age, however, most are knowledgeable about the consequences of receiving Social Security benefits before reaching their full retirement age. 92% know that if they take benefits before full retirement, their benefits will be reduced and 84% 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 earn. However, more than half (52%) do not know that the ability to receive delayed retirement credit increases ends at age 70.
- Social Security continues to be the largest anticipated source of income in retirement. 40% of near retirees believe Social Security benefits will be their biggest source of income in retirement followed by a 401k or 403b plan (17%), pension (13%) and investments (11%).
- More than one-third (36%) of near retirees believe their retirement income would not be able to sustain them for more than 10 years and only 20% believe their retirement plans account for inflation and market volatility.
- Only one third of near retirees have an estate planning document in place. Only 35% report having a will, 33% report having a medical advance directive, 29% report having a health care durable power of attorney, and 25% report having a financial durable power of attorney. Furthermore, only 22% have documented all of their financial information and online usernames and passwords in one place as part of their estate plans, and 23% never plan to.
“The good news is that these individuals have not yet filed for Social Security benefits so they have time to understand the basic facts that can either help or hurt their financial situations in retirement,” added LaPiana. “And for those nearing retirement that have not gotten their estate planning documents in place yet, I urge them to make this a priority.”
Methodology
An online poll about Social Security retirement benefits commissioned by MassMutual was conducted by PSB Insights from January 23 to January 30, 2024 among 1,500 Americans nearing retirement (age 55-65) who have not filed for Social Security retirement benefits.
About MassMutual (Massachusetts Mutual Life Insurance Company)
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.
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