Social Security might be one of the most important financial programs in America, but it’s also one of the most misunderstood.
New research from AARP reveals that while 74% of Americans believe they’re well-informed about how Social Security works, their actual knowledge tells a different story. These knowledge gaps are costing retirees real money, potentially thousands of dollars in lost benefits over their lifetimes.
The survey’s findings arrive at a critical moment. Confidence in Social Security has dropped to just 36% in 2025, down from 43% five years ago, according to AARP. Additionally, 78% of respondents worry that the program won’t provide enough to live on in retirement.
Much of that anxiety stems from a misunderstanding of how the program actually works, rather than its actual financial outlook.
The new trust fund fears
According to CNBC, the AARP survey indicates that 47% of Americans believe their Social Security benefits would be cut by at least 50% when the trust funds are depleted in 2034.
In fact, the Social Security’s trustees estimate a 19% reduction. Ongoing payroll taxes would still cover about 81% of scheduled benefits.
This misunderstanding has real consequences. Workers who panic and claim benefits too early lock in permanently reduced payments. For someone entitled to $2,000 monthly at full retirement age, claiming at 62 out of fear could mean accepting just $1,400 per month instead. That’s a $600 monthly reduction that lasts for life.
Only 34% of survey respondents correctly understood that benefits would continue at a reduced level even after the trust fund was depleted. That means two-thirds of Americans might be making retirement decisions based on false assumptions about the program’s stability.
The old claiming age confusion
Perhaps even more costly is Americans’ fuzzy understanding of when to claim benefits. The AARP survey found 41% didn’t know the earliest claiming age (62 years), while 66% couldn’t identify the age that maximizes benefits (70 years).
This directly affects the amount of money that lands in your bank account each month. According to the Social Security Administration, someone eligible for a $1,000 monthly benefit at their full retirement age of 67, gets only $700 per month if they claim at 62. Wait until 70, and that same benefit grows to $1,240 monthly.
That’s a $540 difference every single month between claiming at the earliest versus latest age. Over a 20-year retirement, we’re talking about nearly $130,000 in additional benefits just from waiting those extra eight years.
Take control of your Social Security strategy
You do not need to be a policy expert to make smarter decisions about Social Security. A few simple actions can help you avoid costly mistakes and increase your lifetime benefits.
- Open a my Social Security account. Visit ssa.gov to check your earnings history and view personalized estimates for claiming at different ages.
- Know your break-even point. Delaying benefits results in larger monthly checks. If you live into your 80s, waiting often leads to more total income.
- Look into spousal and survivor benefits. If you are married, divorced, or widowed, you may qualify for additional benefits based on your spouse’s work record.
- Get guidance that fits your situation. The Social Security Administration offers free consultations, and nonprofits like AARP have tools to help.
- Consider working with a financial advisor. A qualified advisor can help you compare claiming strategies, run projections, and coordinate benefits with your broader retirement plan. If you’ve got more than $100,000 in savings, SmartAsset offers a free service that matches you to a vetted, fiduciary advisor in less than 5 minutes.
Making the most of Social Security starts with understanding how it works. AARP’s research highlights just how much knowledge can affect your financial future. For added tools and member-only discounts that support smarter planning, it may be worth joining. AARP membership is $15/year with auto-renewal, and also slashes expenses on dining, travel, eyeglasses, prescriptions and more. Join now and save hundreds.
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