What Older Workers Don't Know About Social Security

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What Older Workers Don't Know About Social Security
Thu, 04-12-2012 - 1:55pm

By Emily Brandon | U.S.News & World Report

Many people on the verge of retirement lack knowledge about how Social Security works. Most older workers can't identify basic information about the Social Security calculation, including how many years of earnings are factored into their payout and how much their payments will increase due to delayed claiming, according to a recent AARP and Knowledge Networks online survey of 2,053 people ages 52 to 70 who plan to claim Social Security within the next 15 years. Here is what most people in their 50s and 60s don't know about Social Security:

How many years of work are factored into the payout. Social Security benefits are calculated based on your 35 highest-paid years in the workforce, but only 7 percent of survey respondents knew this. Most older workers guessed that the five (30 percent) or 10 (21 percent) years in which they earned the highest salary would be used to calculate their benefit amount.