Social Security pays out around $67.7 billion in benefits to more than 45 million retired Americans, serving as a vital source of income for most who collect it.  Yet as important as these benefits are, many Americans don't understand key facts about them. According to a recent study conducted by MassMutual, 52% of pre-retirees between the ages of 55 and 65 who completed a quiz about Social Security received a D grade. 

Sadly, confusion could directly affect how much money retirees receive, or even whether they get benefits at all. Here are a few commonly misunderstood facts. 

Social Security cards with American paper currency underneath them.

Image source: Getty Images.

1. You only get your full benefit at a certain age 

While 94% of pre-retirees responding to MassMutual's survey knew their benefits would be reduced if they took them before full retirement age, far fewer knew what full retirement age actually means. In fact, less than seven in 10 people knew when they'd hit that milestone. 

Full retirement age varies depending on when you were born. It's 66 for people born between 1943 and 1954; 67 for people born in 1960 or later; and somewhere in between for those born in the intervening years. You can find your full retirement age here

If you retire even one month prior to FRA, you're subject to early filing penalties. For each of the first three years ahead of FRA, those penalties add up to a 6.7% annual reduction in your standard benefit. If you retire more than three years early, benefits are reduced by an additional 5% annually.

2. Benefit cuts could happen automatically in 2035 

According to MassMutual, only six in 10 pre-retirees know Social Security benefits will have to be automatically reduced in 2035 unless changes are made. 

Retirement benefits could fall by as much as 24% at that time because the program's trust funds will run dry and benefits will have to be funded solely out of current payroll tax revenue. Social Security can't collect enough to pay out 100% of promised benefits, so unless lawmakers shore up the program's finances, every retiree will take a huge financial hit. 

3. You don't have to be a citizen to get Social Security benefits

One of the biggest sources of confusion is whether there's a citizenship requirement for Social Security benefits. MassMutual found that just 28% of pre-retirees were aware that you don't have to be a U.S. citizen to collect them.

Noncitizens can receive benefits if they are permanent legal residents with work visas or if they were permitted entry under family unity or immediate relative provisions of U.S. immigration law. They must also have either sufficient Social Security work credits or qualify for spousal or survivor benefits. Even a noncitizen living abroad can qualify under certain conditions.

Don't let lack of Social Security knowledge hurt your benefits

Failing to understand how Social Security works could be a huge mistake, especially if you claim benefits ahead of schedule without realizing it, or if you don't apply for benefits at all because you don't realize you're entitled to them.

Since Social Security retirement benefits are earned benefits that you work hard for, you owe it to yourself to study up on the program and learn how it works. This guide to how Social Security benefits work is a good start. Give it a read and make sure you're not among the majority of Americans who'd earn a near-failing grade when asked about benefits.