Social Security touches the lives of nearly all American retirees. Yet, many people misunderstand even the basic concepts behind this government program.
For the Nationwide Retirement Institute’s latest annual Social Security Survey, just over 1,800 American adults were asked about their attitudes and knowledge regarding Social Security.
As part of the survey, participants were asked to answer 15 true-or-false questions about Social Security. On average, respondents answered six of the 15 questions correctly.
And there were seven questions that less than half of respondents got right. They are as follows.
Social Security benefits are tax-free
True or false? False
Respondents who answered correctly: 49%
Roughly 40% of people who get Social Security benefits pay taxes on them, according to the Social Security Administration (SSA).
Whether you owe taxes on your benefits depends on what the SSA calls your “combined income.” It’s defined as the sum of:
- Your adjusted gross income
- Your nontaxable interest
- One-half of your Social Security benefits
If your combined income is between $25,000 and $34,000, you may owe income taxes on up to 50% of your Social Security benefits. And if you earn more than that, up to 85% of your benefits could be subject to taxes.
You have options to lower or even avoid a tax bill, though. Learn more in “A Surprising Number of Seniors Owe Taxes on Social Security. Here Are 7 Ways to Avoid Paying.”
If you are divorced, you may be eligible for Social Security benefits based on your ex-spouse’s record
True or false? True
Respondents who answered correctly: 48%
As we covered in “8 Social Security Benefits You May Be Overlooking,” you may be entitled to spousal benefits even if you’re divorced. You need to meet the following conditions, though:
- Your ex-spouse is entitled to receive Social Security benefits.
- You and your ex-spouse were married at least 10 years.
- You’re currently unmarried.
- You’re at least age 62.
- The Social Security benefit that you’re entitled to is less than the benefit you would receive based on your ex-spouse’s work.
If you claim spousal benefits after a divorce, it doesn’t affect your ex-spouse’s benefits or the benefits of their current spouse, should they remarry.
If I don’t work at least 35 years, my Social Security benefit will be reduced
True or false? True
Respondents who answered correctly: 42%
When calculating your benefit, the Social Security Administration looks at both your highest 35 years of earnings and the age you file to receive benefits.
If you have less than 35 years of earnings, you will receive a “zero” for each year without earnings. This will reduce the size of your benefit.
It’s a good reason to keep up with your earnings record too, to make sure that it’s accurate, as we covered in “7 Social Security Blunders That Can Ruin Your Retirement.”
Somebody who makes $200,000 pays as much in Social Security taxes as millionaires
True or false? True
Respondents who answered correctly: 37%
There is a cap on the amount of earnings that are subject to Social Security taxes each year.
In 2026, the cap — known as a “taxable maximum” — has been set at $184,500. Earnings above this amount are not subject to further Social Security taxes. That means folks earning large amounts of money do not pay any more in Social Security taxes than those who make $184,500.
Those who earn wages equal to or larger than $184,500 will contribute $11,439 to the program in 2026, with the worker’s employer contributing the same amount.
If you’re self-employed, you pay a tax rate of 12.4% since you do not have an employer to share the burden.
If you claim Social Security early, any spousal benefits you are eligible for will be reduced
True or false? True
Respondents who answered correctly: 37%
You may be able to receive Social Security benefits based on your spouse’s work history, even if you never worked. You can claim these benefits as early as age 62 if your spouse is already receiving payments.
But note that claiming early will permanently reduce the benefit amount you receive. You can determine how much you’ll receive with the SSA’s early retirement calculator.
Social Security is not protected against inflation
True or false? False
Respondents who answered correctly: 37%
Social Security payments are, in fact, protected against inflation thanks to annual cost-of-living adjustments.
Also known as COLAs, these annual bumps in benefits are tied to the Consumer Price Index for Urban Wage Earners and Clerical Workers, which is one of the federal government’s gauges of inflation. In 2026, Social Security beneficiaries received a 3.2% increase in benefits.
You can undo a claiming decision within the first 12 months
True or false? True
Respondents who answered correctly: 34%
You can cancel your application for Social Security within 12 months if you change your mind. This is known as a withdrawal, and you’re allowed to do it once in your lifetime.
It will require you to pay back any benefits received, but it might be worthwhile if you claimed early but then decided you wanted to wait until your full retirement age or beyond to beef up your monthly payments.
See how monthly checks compare across retirees of different ages in “Here’s How Much Social Security Pays American Retirees at Every Age.”
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