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Abstract

Innumerable studies over the past decade have shown that many people lack the basic knowledge of the Social Security system necessary for making informed decisions about when to retire and claim benefits, a decision which will impact their savings and their overall financial security. Accordingly, the Social Security Administration (SSA) seeks to educate and provide information to individuals to help them better understand their options for claiming benefits, how much they can receive, and the implications for personal retirement and financial planning. To gain benchmark information about how much people know about Social Security and the public's attitudes toward the system overall, this project undertook two surveys in the Spring of 2010: a random-digit-dial telephone survey and an internet survey using the American Life Panel (ALP). This report summarizes survey results as well as significant differences between population subgroups. It finds that, in both surveys, levels of Social Security literacy are low: half of all respondents receive a grade of D or F on a quiz testing knowledge of some basic elements of Social Security. Nevertheless, expectations for Social Security are high, as many believe benefits should provide more than just enough for basic necessities. Despite lackluster confidence in the solvency of Social Security, especially among younger respondents, it finds an extremely high level of trust in the SSA and a strong desire for the SSA to provide information not only about how the system works, but also about how to prepare for retirement in general.

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The research described in this report was prepared for the Social Security Administration and conducted by the Financial Literacy Center.

This report is part of the RAND Corporation working paper series. RAND working papers are intended to share researchers' latest findings and to solicit informal peer review. They have been approved for circulation by RAND but may not have been formally edited or peer reviewed.

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