Can You Count on Social Security?
Checks from Uncle Sam will play a big part in helping to finance your retirement--or not. Test yourself to see if you know how much you can really expect to collect.
By Etelka Lehoczky

(MONEY Magazine) – 1) You turned 55 this year (happy birthday), and retirement suddenly doesn't seem quite so far away. At what age will you be able to collect full Social Security benefits?

[A] 62 [B] 65 [C] 66 [D] 67

ANSWER: C. Only 19% of workers in a recent survey by the Employee Benefits Research Institute knew when they'd be eligible. One reason for the confusion: The rules are changing. While 65 used to be the milestone birthday for collecting full benefits, the age now varies from 65 to 67, depending on the month and year you were born. For today's 55-year-olds, as for anyone born from 1943 to 1954, the age is 66. To see when you'll be eligible, go to ssa.gov. Remember too, if you're willing to settle for a reduced payout, you can start collecting as early as 62, no matter when your birthday is.

2) You're fed up with your long commute and crabby co-workers, so early retirement sounds pretty appealing. How big a hit will you take if you start collecting at age 62?

[A] 10% to 15% [B] 20% to 30% [C] 50%, but only until you reach your full retirement age

ANSWER: B. Nearly seven in 10 people grab their Social Security benefits before full retirement age, but the price of that early exit is steep. If you start collecting at age 62, your benefits will be permanently reduced by 20% to 30%, depending on when you were born. If you can stick it out and work beyond full retirement age, however, you can get even higher benefits--a 6% to 8% boost for each year you delay, until you turn 70. You can check out how you would make out under various retirement-age scenarios at the Social Security website; your annual benefits statement also lays these scenarios out for you clearly.

3) You earn a good salary and will wait to collect full benefits. As of today, how much could you get?

[A] $1,002 a month [B] $1,648 [C] $2,053 [D] $3,113

ANSWER: C. This year's maximum benefit of $2,053 is twice as much as the $1,002 that the average retiree gets (plus an additional 50% for a nonworking spouse). Still, $24,000 is not a lot of gold for your golden years. For that you will need to rely on personal savings. So if you're not currently maxing out your 401(k), it's time to get cracking.

4) You're already collecting full benefits, and now you've landed a plum consulting gig. How will this affect your payments?

[A] Your benefits won't change. [B] Your benefits will shrink. [C] Your benefits will increase.

ANSWER: A. Go for it. Once you hit full retirement age, there's no penalty for working. If you collect benefits early, however, your payment will be cut this year by $1 for every $2 you earn over $12,480. But the reduction isn't permanent--it is lifted once you stop working or reach full retirement age.

5) All the doomsday talk about Social Security has you worried. When is Uncle Sam expected to run out of money for retirees?

[A] 2017 [B] 2040 [C] Never

ANSWER: C. Social Security is primarily financed by payroll taxes. As long as people work, the system will never completely run out of money. The issue is whether the government will have enough to pay all the benefits now promised, once most baby boomers retire and fewer workers are paying into the system. By 2040, if no changes are made, benefits will have to be cut by 26%--which is why personal savings, not Social Security, should be the foundation of a sound retirement plan.

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Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer LIBOR Warning: Neither BBA Enterprises Limited, nor the BBA LIBOR Contributor Banks, nor Reuters, can be held liable for any irregularity or inaccuracy of BBA LIBOR. Disclaimer. Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.