Americans increasingly rely on Social Security to support their retirement, yet according to a new study, a clear majority don’t understand how the program works. Worse, they don’t know enough to maximize Social Security payouts and benefits.
The Biggest Social Security Knowledge Omissions
Not knowing what Social Security brings to the table can easily lead to program management mistakes that can cost U.S. retirees plenty.Spousal benefits aren’t as high as the math suggests
Claiming too early can lead to problems that Social Security recipients don’t fully comprehend, especially after a spouse passes away.“In our practice, we often see people claiming Social Security as early as possible at age 62,” Nick St. George, founder at St. George Wealth Management, told NTD News. “That’s a permanent reduction of up to 30%.”
Even more alarming, few people do the math as they lock in a lower income for life for themselves by claiming early and then claiming their spouse’s survivor benefit.
“In that scenario, most people think when their spouse dies, they’ll get the combined full amount from both spousal payouts,” St. George noted. “But you don’t get both.”
New rules on increased program benefits often go ignored
Seniors who didn't pay much into Social Security because they were in public service and had government benefits instead are now eligible for more of their spousal, widow, and possibly their own Social Security benefits than in prior years.“Yet many recipients don’t know that,” Tessa Steinemann, a certified financial planner at True Alpha Wealth Management, told NTD. “This is due to the repeal of WEP/GPO (Windfall elimination provision and Government Pension Offset), signed into law on January 5, 2025.”
People don’t always know the full retirement age number
The Allianz report noted that 55 percent of Americans believe the age at which they can receive full Social Security benefits is 65. “In fact, the full retirement age varies between 66 and 67, depending on birth year,” the report noted.If a recipient chooses the wrong retirement age based on faulty assumptions about the full retirement age, they could easily lose a big chunk of otherwise earned Social Security income.
Get on the Same Page With Social Security
The best way to prep for an optimal Social Security plan starts with meeting with both a financial planner who understands the nuances of Social Security and the local Social Security office to ensure the most accurate numbers. “There are many strategies to take social security, which depend on current and prior marriages, and other income streams,” Steinemann said. “Meeting with a professional to understand how the different options create different outcomes in retirement is extremely important.To best prepare, start early, experts say. “Check your record annually on your account,” Kindness advised. “Make sure all of your work is accurately recorded in the Social Security Administration’s database. Look at your options for when to retire and how different claiming ages impact your monthly benefit amount, both now and over time. If you are married, consider these factors jointly to determine the best strategy for both of you.”
Overall, Social Security is not a single decision. It is a series of decisions made over the years. “Spend a little time planning, and avoid costly mistakes while building a predictable stream of retirement income,” Kindness added.