Social Security is a popular entitlement program, but many people don't understand it. If you don't learn the truth about these benefits early on, you may face some financial shocks when it comes time for retirement and you eventually think about claiming your checks. 

To make sure you aren't caught off guard, check out these shocking Social Security stats. 

Older adult using computer and looking at financial papers.

Image source: Getty Images.

1. The average benefit is lower than you might expect

The first number that may come as a big surprise is the average benefit. For 2022, the typical retiree will receive just $1,657. That number is shockingly low because many people expect Social Security to be a major income source in their later years.

The reality is, while your retirement benefits can help fund your retirement, they are woefully insufficient to cover even the basic necessities without additional income.

Social Security is meant to replace 40% of pre-retirement earnings, working in conjunction with savings and a pension to cover all the costs you'll need once you no longer have a paycheck to pay bills. If you aren't prepared for that, you could face major shortfalls. 

2. The benefits reduction from claiming early is surprisingly large

The second shocking Social Security stat relates to the benefits reduction you'll experience if you end up filing for your checks early.

Social Security can be claimed starting at 62, and many retirees start their benefits ASAP because they need the money to retire early. But filing so young could result in a 30% reduction in monthly income if you have a full retirement age (FRA) of 67. FRA is between 66 and 2 months and 67 depending on birth year. It's the age for which you must wait if you want to get a full unreduced benefit.

Unfortunately, many people don't realize just how much an early claim can reduce the checks they get. And some believe their payments will be recalculated at FRA and go back up even if they filed early. That's simply not the case, so don't get caught napping by a large permanent reduction in your monthly payments. 

3. Far too many retirees rely on Social Security for a substantial portion of their income 

The last shocking stat relates to how many people rely on Social Security to provide a greater percentage of income than it was designed to provide. According to the Social Security Administration, 37% of men and 42% of women get at least half their retirement income from their benefits. And 12% of men and 15% of women get 90% or more of their retirement funds from Social Security.

Once you know how low Social Security benefits tend to be, you'll understand why these numbers are disturbing. This stat means far too many people are struggling to live on an income that's barely above the poverty level -- and that requires them to take a substantial pay cut compared to their pre-retirement earnings.

By recognizing the realities of what benefits can do for you and how claiming them early could affect them, you can make a realistic plan for the role they will play in supporting you in your later years.