The long arm of Social Security reaches far and wide, with nearly 66 million Americans receiving some kind of benefit. Even so, many Americans don’t have basic knowledge of the program.
A survey released by the Nationwide Retirement Institute found that roughly two in five (39%) respondents don’t know the eligible age to receive full benefits. As GOBankingRates reported, just more than half of those not currently receiving Social Security don’t have a clear idea of how much they will get in Social Security income when they do apply for benefits.
“It’s indisputable that Americans across all generations need more Social Security education,” Tina Ambrozy, senior vice president of Strategic Customer Solutions at Nationwide, said in a press release. “Unfortunately, failing to close the knowledge gap and correct some of these misconceptions can have costly repercussions.”
To help you understand more about the program, here are five facts about Social Security that are less common knowledge than you might think.
Social Security Doesn’t Just Pay Benefits to Retired Workers
Although many Americans equate Social Security with retirement income, the program also provides life insurance and disability insurance protection. Yes, older adults make up about four in five beneficiaries, according to a report released earlier this year by the Center on Budget and Policy Priorities. But another 20% receive Social Security Disability Insurance or are young survivors of deceased workers,
Spouses and children of retired workers also qualify for benefits. The average spousal benefit for retired workers and families is $831 a month as of October 2022, according to the Social Security Administration. The average child benefit is $787 a month. For survivors of deceased workers, the average child benefit is $981 a month, and the average benefit for widowed mothers and fathers with child beneficiaries in their care is $1,136 a month.
Retirement Eligibility Does Not Mean Full Retirement Age
You can start receiving your Social Security retirement benefits as early as age 62, but you’re not entitled to full benefits unless you wait until your full retirement age. The FRA is 66 years old if you were born in 1954 or earlier, then it gradually increases until it reaches 67 for those born in 1960 or later. You can delay benefits until age 70 or older to ensure a bigger monthly check. After age 70, however, there is no advantage to delaying benefits any longer.
Your Monthly Payment Will Not Look Like Everyone Else’s Monthly Payment
The amount of your Social Security retirement benefit depends on a number of factors, including how much you earned during your career and when you decide to claim benefits. The average retirement payment was $1,630 a month as of October 2022, according to the SSA. But as AARP points out, the maximum benefit — the most an individual retiree can get — is more than $3,300 a month for those who filed for Social Security at full retirement age in 2022.
Your Monthly Benefit Changes from Year to Year
The SSA has provided an annual cost-of-living adjustment every year since 1975 to help beneficiaries deal with inflation. Since then, payments have risen in every year but three. Social Security recipients will be getting much bigger payments in 2023 thanks to an 8.7% COLA that will boost the average monthly check by $146. That’s the highest COLA since 1981.
Take Our Poll: Do You Think You Will Be Able To Retire at Age 65?
Social Security: Why Not Everyone Will Get An 8.7% COLA Increase in 2023
Your Benefits Will Not Go Up Automatically if You Claim Early
Nearly half (45%) of respondents in the Nationwide Retirement Institute survey mistakenly believe that if they claim benefits early, their benefits will go up automatically when they full retirement age, or they don’t know this is false. Sorry, but it is false. As the SSA notes, if you start receiving benefits early, your payment is permanently reduced by a small percentage for each month before your FRA.
More From GOBankingRates
This article originally appeared on GOBankingRates.com: Social Security: These 5 Facts Are Less Common Knowledge Than You Might Think