Social Security turns 80 this year. The program, which was designed to sustain older Americans in retirement, is going through a few later-in-life issues itself.
Social Security has been debated and discussed for years. Now, with millions of Americans nearing retirement, the conversation is heating up and ready to boil over. Does the program need an overhaul? Does it need a few tweaks or is it good as is? These are questions we will hear in every political debate and speech for the next year and beyond.
What is lost in these passionate discussions is how little most Americans even know about this retirement benefit. Massachusetts Mutual Life Insurance Company (MassMutual) recently commissioned a study conducted by KRC Research and found that more than 7 in 10 Americans received a failing grade when asked to answer basic true/false questions about Social Security. And out of 1,500 respondents, only one received a perfect score by answering all questions correctly.
Results from the 2015 MassMutual Social Security Survey shed light on a fundamental problem we must address. Pessimistic attitudes and dwindling retirement savings have many Americans scared about their financial futures. The lack of knowledge about Social Security only compounds this problem.
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Interestingly, despite having minimal knowledge about the Social Security retirement program, a recent Gallup Poll (April 2015) found 36 percent of American workers are expecting Social Security to be a major source of retirement income — the highest percentage in 15 years. The number of young workers saying Social Security benefits will be a large part of their retirement income has doubled since 2005.
Yet, that social safety net that Americans have relied on since the Great Depression is threatened. According to the Social Security Administration, there were 42 workers contributing to Social Security for every one person receiving benefits in 1945. By 2010, there were only three (according to the Social Security Administration).
How are we, as a nation, supposed to save Social Security when so many of us remain unclear about how it works? Equally important, how do we manage our individual retirements with so many unanswered questions about many of the key benefits?