When MassMutual recently surveyed 1,500 people 55 to 65 on their knowledge of Social Security, more than half failed or barely passed. That's a jaw-dropping figure, especially since Social Security income is vital to most retirees.
Here are some more eye-opening stats related to Social Security. See how many surprise you.
No. 1: $1 trillion
Let's start with the sheer size of Social Security. The program's overall spending is about $1 trillion annually, as it pays benefits to roughly 68 million Americans (as of 2018). That $1 trillion sum is roughly 5% of the entire U.S. gross domestic product (GDP) -- which was recently about $21.5 trillion.
No. 2: 22 million
Social Security is keeping about 22 million people out of poverty, according to the Center on Budget and Policy Priorities. That doesn't mean it's giving them a comfortable, middle-class existence, either, as the federal poverty level for single people was recently only $12,760, and only $17,240 for two people.
No. 3: 8.8%
Even worse, many people are living below the poverty line even with Social Security income. According to 2015 data from the Social Security Administration (SSA), fully 8.8% of recipients were living in poverty, and another 5% were "near poor," meaning their income was between 100% and 125% of the federal poverty level. The rates were significantly higher for single people and minorities.
No. 4: $1,507
Many people find it comforting to know that they will have Social Security income coming to them in retirement, but they may be over-estimating how much they'll receive. So here's a wake-up call: The average monthly Social Security retirement benefit was recently $1,507. That's about $18,000 annually. If you earned more or less than average over your working life, your benefits will be, respectively, more or less -- but the most you could receive this year is $3,790 per month, or about $45,000 annually.
No. 5: $1,627 vs. $1,297
It's worth noting that the average Social Security retirement benefit is a lot different for men and women -- because women tend to earn less over their lives, due to income inequality and also because they often have to leave the workforce for some years to care for children or other family members. As of 2018, the average benefit check was $1,627 for men and just $1,297 for women.
No. 6: 24%
Fortunately, there are ways to increase Social Security benefits. A key one is the decision you make about when to start collecting those benefits. Each of us has a "full retirement age," which is 66 or 67 for most of us. But we can start collecting benefits as early as age 62 and as late as age 70. For each year earlier than our full retirement age that we start, our benefits will shrink. And for each year beyond it that we delay, they'll increase -- by about 8% annually. So delay from age 67 to 70 and you'll enlarge those checks by about 24%.
No. 7: 77%
Lots of people worry that Social Security is going bankrupt and fear that they'll collect no benefits in their retirement. That's far from the case, though. Social Security is facing some serious challenges ahead, but the recent worst-case scenario was that around 2035, in about 15 years, it wouldn't have enough to pay retirees their full benefits -- but it would have enough to pay them about 77% of those benefits. With so many people living so close to poverty, that's still a terrible and frightening prospect. But 77% is a whole lot better than zero. (Fortunately, there are lots of ways to strengthen the program, should our representatives in Washington choose to do so.)
The more you know about Social Security, the more you may be able to collect from the program, and that could make a big difference during your retirement.