True or false: Test yourself on Social Security basics

Social Security is arguably the most important retirement program in the United States. See how much you know about it with this 10-question quiz from a financial planner.

  • By Jamie P. Hopkins,
  • Kiplinger
  • Living in Retirement
  • Social Security
  • Living in Retirement
  • Social Security
  • Living in Retirement
  • Social Security
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Social Security is arguably the most important retirement program in the United States. For a secure retirement, it is critical that those near and in retirement understand how their Social Security benefits work. Unfortunately, research shows that many people don't. For instance, a report from The American College of Financial Services showed that only roughly 25% of those ages 60 to 75 could pass a retirement income literacy quiz, including questions about Social Security.

The lack of literacy in retirement income planning in the United Sates indicates that many people are unable to make informed decisions about their own retirement and Social Security benefits. Test out your own Social Security literacy with this 10-question true/false quiz.

1. For roughly two-thirds of American retirees, Social Security represents more than 50% of their retirement income.

  • True
  • False

Answer

2. Currently, the Social Security system is on a trajectory to run out of money around 2033 and would stop making any payments in 2034.

  • True
  • False

Answer

3. To maximize the total amount of Social Security benefits paid, a single person who expects to live to age 90 should consider delaying to start benefits until age 70.

  • True
  • False

Answer

4. Since Social Security is funded through a payroll tax, Social Security benefits that you receive are always income tax-free.

  • True
  • False

Answer

5. One challenge of relying on Social Security benefits throughout a long retirement is that the benefits are not adjusted for inflation.

  • True
  • False

Answer

6. Joe is receiving $1,500 a month from Social Security and his wife Ann is receiving $1,000. If Joe passes away, Ann will receive $1,750, which is half of Joe’s benefit plus her own benefit.

  • True
  • False

Answer

7. A retiree can claim a Social Security worker’s benefit as early as age 60.

  • True
  • False

Answer

8. In some cases, a spouse who never worked can still get Social Security retirement benefits based off of their working spouse’s benefit as early as age 62.

  • True
  • False

Answer

9. Social Security calculates retirement benefits based off of an individual’s highest 35 years of work history.

  • True
  • False

Answer

10. Social Security retirement benefits will replace a higher percentage of a worker’s income who has always earned $50,000 a year as opposed to someone who always earned $100,000 a year.

  • True
  • False

Answer

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© 2018 The Kiplinger Washington Editors, Inc.
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