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Social Security Statement & Younger Workers' Program Knowledge

February 2015

Prior to the Social Security Statement's introduction, most younger workers were knowledgeable about Social Security's programs

Before the Statement's introduction, more than 76 percent of younger workers knew that Social Security provides survivor and disability benefits financed through a payroll tax. After Statement receipt, more than 85 percent of younger workers knew about SSA's programs and financing.

However, younger workers were less knowledgeable about Social Security benefits and remained so even after Statement receipt

Prior to the Statement's introduction, 44 percent of younger workers knew that benefits increase automatically with the cost of living and 62 percent knew that the eligibility age for full retirement benefits was increasing. After Statement receipt, knowledge increased, but still less than 50 percent knew that benefits are inflation-indexed and 72 percent knew that the full retirement age was increasing.

Statement receipt was associated with an increase in the percentage of correct answers, regardless of education, income, race/ethnicity, or gender

There were no consistent patterns among the level of income, the level of education, or the respondents' race/ethnicity and the percentage of correct answers on any question. There were some differences by sex, with men generally scoring higher on the benefits-knowledge questions and women scoring higher on the program-knowledge questions.

Percentage of Workers Aged 46 or Younger Who Correctly Answered Six Social Security Questions Before and After Statement Receipt
Correct response 1998 Survey Statement Nonrecipients 2001 Survey
Statement
Recipients
Percent correct Percent correct Difference from 1998
Benefits-knowledge questions  
Benefits rise automatically with the cost of living. 43.8 49.8 6.0***
Full retirement age will rise in coming years. 62.4 71.7 9.3***
Retirement benefit amount depends on earnings history. 81.4 93.4 12.0***
Program-knowledge questions  
Social Security provides benefits to families of workers who die. 76.1 87.1 11.0***
Social Security pays benefits to workers who become disabled. 78.5 85.2 6.7***
Social Security is paid for by a tax placed on both workers and employers. 88.0 90.8 2.8** 
SOURCE: Authors' calculations based on 1998 and 2001 Gallup survey results.
NOTE: ** = statistically significant at the p = .02 level; *** = statistically significant at the p = .01 level.
  • Beginning in late 1999, the Social Security Administration (SSA) mailed the Social Security Statement to all eligible workers aged 25 or older.
  • Gallup, Inc. conducted six surveys between 1998 and 2004 for SSA to evaluate the impact of the Statement on workers' Social Security knowledge.
  • Comparing results from Gallup's 1998 and 2001 surveys shows younger workers' knowledge of Social Security programs and benefits before and after Statement receipt.
  • Young workers' lack of knowledge about Social Security benefits could have significant implications for their retirement security.
  • Social Security Statement is a statement of earnings and benefits first mailed to eligible workers aged 25 or older in 1999.
  • Younger workers are workers aged 46 or younger.
  • Full Retirement Age (FRA) is the age of eligibility for full retirement benefits.

SOURCE: Smith, Barbara A., and Kenneth A. Couch. 2014. “How Effective Is the Social Security Statement? Informing Younger Workers about Social Security.” Social Security Bulletin 74(4): 1–19.

NOTES: All content is simplified for presentation. Please see source material for full details and caveats.

The findings and conclusions presented in this summary are those of the authors and do not necessarily represent the views of the agency.