Take This 13 Question Quiz and Find Out
Social Security is clearly in your future, and that means you need to understand how Social Security works. Unfortunately, I have a feeling you don't. MassMutual just offered a quiz on social security. 13 true or false questions. Just 13 of them. They're just true/false. And 65% of those who took this quiz got a D or an F. Oh, my goodness. Only 1% got a perfect score. And yes, of course, as you would expect and hope, I got a perfect score when I took this quiz. Let's see if you can do the very same. We're going to go through the quiz right here, right now. So, let's see how you do.
1: In most cases, my benefits will be reduced if I start before my full retirement age. True or false? That's true. You can begin to receive Social Security as early as age 62, but you'll get less than if you wait.
2: If I'm receiving benefits before my full retirement age and I continue to work, my benefits might be reduced based on how much money I earn. True or false? It's true. The Social Security Administration takes the attitude that if you're making a lot of money from a job, then you ought to be taxed on your Social Security benefits. So be careful about taking Social Security if you're still working.
3: If I have a spouse, they can receive benefits based on my record if they've never worked. True or false? It's true. It's called a spousal benefit and acknowledges that a lot of stay-at-home spouses raising children and caring for the household shouldn't be denied Social Security merely because they never earned an income.
4: If my spouse passes away, I'll get both my full benefit and their full benefit. True or false? It's false. You either get your benefit or your spouse's, whichever is higher, but not both.
5: Generally Social Security retirement benefits are different for those in same sex marriages. True or false? The answer is false. The government does not differentiate based on sexuality or gender.
6: The money I pay into Social Security goes into a specific account for me and stays there until I begin to receive Social Security benefits. True or false? It's false. All the money that goes into Social Security goes into one big bucket. There is no special or separate account just for you.
7: Under current law, Social Security benefits could be reduced 20% or more for everybody within 10 years. Is that true or false? It's true. The Social Security trust fund is being depleted, and when it's gone by about 2032, everybody's benefits are going to get cut 20 to 25%.
8: If I have dependent children 18 years of age or younger, they may also qualify for Social Security benefits. True or false? It's true. If you are taking your benefits in retirement and you've got minor children, they can qualify for Social Security, too, until they get age of adulthood.
9: If I get divorced, I might be able to collect Social Security benefits based on my ex's earnings. True or false? It's true. You don't have to still be married in order to get benefits based on your ex.
10: Under current law, full retirement age is 65. Doesn't matter when you were born. True or false? That's false. You might have to be in your 66th year in order to be deemed full retirement age.
11: If I delay taking Social Security benefits past age 70, my ultimate benefits will rise every year that I wait. True or false? It's false. Your benefits will increase every year from 62 to 70. But after age 70, the benefit is locked in. So, there's no reason to delay taking your Social Security past age 70. If you're 70 or older, make sure you're getting your Social Security.
12: Social Security benefits are subject to income tax, just like withdrawals from an IRA. True or false? It's false. They are not taxed the same.
13: I must be a US citizen to collect Social Security retirement benefits. True or false? The answer is false. It's not a matter of whether you're a U.S. citizen. It's a matter of whether you've paid into the Social Security system.
So how did you do? Two thirds of all Americans failed that test. Only 1% got every question correct. If you didn't get a lot of those answers right. You need to talk with a financial advisor in your 50s so that you can understand how much you can reasonably expect to get from Social Security in order to get the maximum, because when you start to collect will make that determination. And if you're married, the implications for your spouse are substantial. So, make sure you're talking with a financial advisor now. Well, before you reach Social Security age. The advisors at Edelman Financial Engines can be very helpful. Just reach out to them at PlanEFE.com/Ric.