Financial education helps people learn about savings, credit and loans. It also helps prepare people for life changes and weather the unexpected. Financial knowledge is essential when planning for retirement.
So, how prepared are adults in the United States for their retirement? The National Endowment for Financial Education (NEFE) conducts polls on key issues, like retirement savings, that affect a person’s financial past, present, and future.
Here’s what we have learned over the past year:
• In a financial well-being poll conducted during the COVID-19 pandemic, 85% of respondents confirmed that some aspect of their personal finances was causing them stress. For 31% of respondents, that concern was “having enough saved for retirement.”
• In that same poll, 70% said they made financial adjustments due to the COVID-19 pandemic. Of that group, 27% increased contributions to their emergency savings, retirement savings, or other savings or investments. In comparison, 21% tapped into emergency savings—or borrowed against retirement savings.
• In a poll about financial education mandates, 80% of adults said they wish they were required to complete a semester- or year-long course focused on personal finance education during high school. Also, 88% think their state should require a semester- or year-long course for high school graduation.
• In that same poll, 84% of those approaching retirement age said “spending and budgeting” should be taught in schools.
Lifetime financial education can be a helpful tool in preparing for retirement. This includes understanding Social Security retirement benefits and making the most of retirement income. You can learn more on our retirement page at www.ssa.gov/retirement.
A personal my Social Security account should be a part of your financial plan. With a secure my Social Security account, you can verify your earnings history, get personalized retirement benefit estimates, and more. If you don’t have an account, you can easily create one at www.ssa.gov/myaccount.
To learn more about NEFE’s mission, visit their website at www.nefe.org. Please share this information with friends and family.
Q & A
Q.: My spouse doesn’t have enough work credits to qualify for Social Security retirement benefits. Can they qualify on my record?
A.: A spouse receives one-half of the retired worker’s full benefit unless the spouse begins collecting benefits before full retirement age. If the spouse begins collecting benefits before full retirement age, the amount of the spouse’s benefit is reduced by a percentage based on the number of months before he or she reaches full retirement age. You can learn more by reading our online publication, Retirement Benefits, at www.ssa.gov/pubs.
Q.: Is it true that a person can own a home and still be eligible for Supplemental Security Income (SSI) benefits?
A.: Yes. A person who owns a home and lives in that home can be eligible for SSI benefits. Although there is an asset limit for people to qualify for SSI, some things don’t count toward that limit, such as a house, a vehicle, and some funds set aside for burial expenses. To learn more about SSI and the eligibility requirements, browse our booklet, “Supplemental Security Income (SSI)” at www.ssa.gov/pubs/11000.html.
Q.: I am expecting a child and will be out of work for six months. Can I qualify for short-term disability?
A.: No. Social Security pays only for total disability — conditions that render you unable to work and are expected to last for at least a year or end in death. No benefits are payable for partial disability or short-term disability, including benefits while on maternity leave.
Q.: I have been getting Social Security disability benefits for many years. I’m about to hit my full retirement age. What will happen to my disability benefits?
A.: When you reach full retirement age, we will switch you from disability to retirement benefits. But you won’t even notice the change because your benefit amount will stay the same. It’s just that when you reach retirement age, we consider you to be a retiree and not a disability beneficiary. To learn more, visit www.ssa.gov.