Pop Quiz: True or False: Social Security retirement benefits are subject to income tax just like withdrawals from a traditional IRA.
If you answered “False,” you are smarter than more than 60% of your fellow Americans who are about to retire. In fact, if you know anything about how Social Security works, there’s a good chance you’re smarter than nearly 70% of people near retirement age when it comes to understanding one of your most important sources of retirement income. .
Those are the findings from the 2023 Social Security Retirement Benefits Questionnaire of near-retirees from Massachusetts Mutual Life Insurance Co. Of the 1,500 people ages 55 to 65 who took the questionnaire, 69% either failed or barely passed the 13 questions. survey (posted in full below). And only 1% managed to answer all the questions correctly.
For practical help understanding Social Security, consider contacting a licensed financial advisor for free.
Even more worrying is the fact that more people failed the quiz this year than last year: a third (35%) got six or more questions wrong compared to 29% last year.
“One of the most concerning findings was that 43% of near-retirees do not know what percentage of their retirement income will come from Social Security benefits,” said Paul LaPiana, CFP, chief product officer at MassMutual. “Knowing your total retirement income and where it will come from is part of the foundation of retirement planning.”
If you’re ready to be connected to local advisors who can help you achieve your financial goals, start now.
How do you compare? Try the True or False quiz and see for yourself, and you’ll even have an advantage on number 12. (Social Security benefits are not subject to any income tax until you exceed a certain income limit, which is $25,000.) . for single filers and $32,000 for joint filers).
MassMutual Social Security Retirement Benefits Questionnaire 2023
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In most cases, if I receive benefits before my full retirement age, they will be reduced for early filing.
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If I receive benefits before my full retirement age and continue working, my benefits may be reduced depending on how much I earn.
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If I have a spouse, he or she can receive benefits from my record even if he or she does not have an individual income history.
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Generally, if I am married to people of the same sex, there are different eligibility requirements when it comes to Social Security retirement benefits.
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If I have a spouse and he or she dies, I will receive both my full benefit and my deceased spouse’s full benefit.
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The money that comes out of my Social Security paycheck goes into an account specifically for me and stays there, earning interest, until I start receiving Social Security benefits.
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If I apply for retirement benefits and have dependent children age 18 or younger, they may also qualify for Social Security benefits.
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If I get divorced, I may be able to collect Social Security benefits based on my ex-spouse’s Social Security earnings history.
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Under current law, Social Security benefits could be reduced by 20% or more for everyone by 2035.
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Under current Social Security law, full retirement age is 65, regardless of when you were born.
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If I delay receiving Social Security benefits after age 70, I will continue to receive delayed increases in the retirement credit each year I wait.
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Social Security retirement benefits are subject to income tax just like withdrawals from a traditional IRA.
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I must be a U.S. citizen to collect Social Security retirement benefits.