Report: 5 Things Most Americans Don’t Understand About Social Security

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About 70% of U.S. adults are concerned about Social Security running out of money in their lifetimes. That’s according to a study from the Nationwide Retirement Institute, part of the Nationwide Mutual Insurance Company.

The Institute’s eighth annual Social Security Consumer Survey details key points that many Americans don’t understand about Social Security.

The survey was conducted online by the Harris Poll on behalf of Nationwide between April 19 and May 7, 2021.

5 Social Security Facts That Many Americans Don’t Know

In this article, I’ll discuss some knowledge gaps highlighted in the survey pertaining to retirement benefits. To fill in those gaps, I’ll source information from, the official website of the U.S. Social Security Administration. And of course, we’ll get some tips from money expert Clark Howard.

1. Age of Eligibility

Nearly two out of five people (39%) who responded to the survey said they’re unsure what the eligible age is to receive full benefits.

According to, “The full retirement age is 66 if you were born from 1943 to 1954. The full retirement age increases gradually if you were born from 1955 to 1960 until it reaches 67. For anyone born 1960 or later, full retirement benefits are payable at age 67.”

Clark says that it will be better for your wallet if you wait until age 70 to start taking your benefits

“Every year that you wait, you get an additional 8% in your check. And once you start taking it, every [cost of living] increase is based on the base that you started at,” Clark says. “So you end up with a lot more money to live on later in life if you wait to take Social Security.”

2. Payments

The survey says 51% of those who have yet to receive Social Security benefits aren’t sure how much they’ll get each month.

To find out how much you could collect, use this Social Security calculator from the Social Security Administration (SSA).


3. Spousal/Child and Survivor Benefits

Only 30% of survey respondents said they know that a spouse and child of a worker may qualify for benefits.

It depends on the worker’s earnings and whether or not the spouse is getting retirement income of his or her own.

The SSA website says: “If they qualify, your ex-spouse, spouse, or child may receive a monthly payment of up to one-half of your retirement benefit amount. These Social Security payments to family members will not decrease the amount of your retirement benefit.”

Read more from the SAA about spousal benefits here.

If the worker dies, there are also possible benefits for a surviving spouse and child, according to

  • Widow or widower full retirement age or older: 100%
  • Widow or widower, age 60: 71½ to 99%
  • Child under age 18 ((19 if still in high school) or disabled: 75%

4. Hedge Against Inflation

37%: That’s the percent of survey respondents who said they weren’t aware that Social Security payments take inflation into account.

According to the SSA, cost-of-living adjustments are baked into your Social Security payments. The SSA calls this “indexing.” 

“In the absence of such indexing, the purchasing power of Social Security benefits would be eroded as rising prices raised the cost of living,” it says on an SSA policy page.

5. No Adjustments

45% of the survey respondents said they believe that if they claim their benefits early, those payments will increase in amount once they reach full retirement age comes.

The truth is that claiming your benefits early will reduce the monthly payments you’ll receive before and after you reach full retirement age.


Final Thoughts

As for how long Social Security will be around, some estimates say the well will run dry sometime around 2034 if U.S. Congress fails to take action in some way to replenish the coffers. But Clark reasons that the more likely scenario is that benefits will be reduced rather than stopped.

“There’s no need to panic about Social Security coming up short of money … because it’s not like Social Security will go from paying what it pays out to zero,” Clark says.

“It means in the future, the program will have to trim its benefit some or increase taxes some in order to continue to pay the benefit people have expected.”

Want to learn more money tips? Here are ways to save money in retirement.

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