How Well Do You Understand Social Security? - Southern Illinoisan, TCRS

That’s not a trick question, and maybe there’s a better way to introduce the subject, like “Do you understand Social Security well enough to ensure that the decisions you make when you get there are best for your situation?” Unfortunately, it seems like a majority of Americans are lacking a solid understanding of this critical retirement support program, and a recent Transamerica Center for Retirement Studies (TCRS) report bears this out.

As highlighted in a post on the Southern Illinoisan by the Motley Fool’s Maurie Backman, “…only 25% of workers across all generations say they know a great deal about how the program works.” That becomes problematic when these workers age into Social Security eligibility, and can lead to making decisions that have a long-term impact on their financial situation later in their retirement years. For example, the fact that Social Security by design will only replace about 40% of pre-retirement earnings is often not clearly understood, and neither is the discounting that comes with filing before full retirement age. Although the Transamerica study deals with much more than just Social Security knowledge, Ms. Backman correctly points out that increasing this knowledge can help workers be “better prepared” for retirement.

So, Ms. Backman’s post summarizes the key Social Security facts that workers in all generations should have clear in their long-term financial planning processes, beginning with the importance of understanding details like how benefits are calculated, the impact of full retirement age, and so on. Read Ms. Backman’s post here, and if you’re interested in a more global view of workforce perspectives on retirement in general, you might want to check out the full TCRS study here… Even further, if you have any questions about how Social Security fits into your individual retirement strategies, know that the AMAC Foundation offers a free service through which its staff of trained and accredited Social Security Advisors provide one-on-one counseling. Learn more about this service here…

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