amiyanandy
The level of trust in Social Security is gradually going up, still, not all of the Americans are confident how and when they will get the benefits.
There is a new tendency that emerged: the younger generation tends to be more positive about their future payments, although the majority of them are getting the essential information about the system wrong. What is the result? A funny mix of false hope and misconceptions.
Hope is on the rise — along with uncertainty
Recent surveys reveal that 50% of adults below 30 are now of the opinion that they will ultimately get Social Security. In 2015, that group was the 34% who were ones that believed that. It’s a significant increase.
Think positive but with doubt.
However, at the same time, in only one survey, it was just 13% of the US citizens who had a fair guess of the age they could retire with 100% benefits. This is the age when people are allowed to claim all of their benefits. In general, people thought the age was 60 — while, for most Americans, it is indeed 67 today.
A lot of those in Generation Z believed their full retirement age to be 54 or 55. That’s as much as ten years earlier than the correct retirement age.
What are the reasons behind the surge in the number of people feeling positive?
Several reasons can account for a boost in people’s confidence about the system:
- Past Cost of Living Adjustments (COLAs) have raised monthly payments
- Politicians’ pledge to safeguard benefits have become breaking news
- There is less talk about “Social Security running out of funds” and that less in the big news sources.
Up to now, seniors — particularly those aged 50 or older — have had faith in the wheel. Yet, currently, even the younger segment of the workforce is starting to get this feeling of belief, although an in-depth understanding of the system’s regulations may be missing.
Misinformation is leading to errors
There is a lot of confusion going around about the way benefits grow, as well. The astonishing fact is that nearly half of adults questioned were of the opinion that when they claim early, their check will be increased again once they hit full retirement age. Well, that’s just not true.
If you apply for Social Security early (for instance, at 62 years old), your check will be permanently reduced. It will not go up again when you reach the age of 67.
That is one mistake that could make one miss out on hundreds of dollars every month for the rest of their life.
Lack of financial education is part of the issue
Advisers are of the opinion that the primary reason for people not being aware of the abovementioned is pretty straightforward: the Social Security program was not well explained to them.
It is almost never mentioned in schools. The majority of workers don’t even come close to it in their mind until the sunset of their careers. And lies come around easily on social networks.
Even those who are in their thirties or their forties and are full of juice at work can feel flabbergasted by the issue. To give you an example, some think they don’t qualify for a Social Security check at all. While others, on the other hand, believe they can “pay into the system” for a couple of years and still receive a full check, the richest one.
What could help fix this?
The idea of issuing basic Social Security education through financial literacy programs has been suggested by a few lawmakers — also including those given by the companies or available from tax preparers.
There is also a demand to make the my Social Security online portal more user-friendly, giving the users the option to understand their estimated retirement ages and benefits with the help of clear language and tools.
The Social Security Administration does, in fact, have educational material available, but it is often overlooked by people.
A growing number of Americans today anticipate receiving Social Security benefits. It’s a positive indicator that the public has a good view of the system over the long run. But if they do not have a better understanding of how the system operates that trust could be very costly.
Considering that benefit ages and income limits adjust, the major issue facing the new generation might not be whether or not they can get Social Security but if they take proper steps for the eventual arrival of that money.
