Most Americans will make one of the most consequential financial decisions of their lives without understanding the rules governing it. That is not a prediction. It is what the Nationwide Retirement Institute’s 2025 Social Security Survey makes plain, drawing on responses from 1,812 U.S. adults who currently receive or expect to receive Social Security. The data is not flattering, and the financial consequences of that ignorance compound over a retirement that could last two or three decades.
The Knowledge Gap Is Bigger Than Most People Realize
Only 21% of survey respondents correctly identified the age at which they qualify for full Social Security benefits, and 38% admitted they simply did not know their full retirement age. On a 15-question true-or-false test covering basic Social Security mechanics, the average respondent answered just 8 correctly. The lowest-scoring topics were among the most consequential: only 26% knew that a claiming decision can be undone within the first 12 months, and only 27% correctly identified that workers do not pay Social Security taxes on all of their income.
What makes this more striking is that 74% of respondents say they feel confident claiming and managing their benefits without the help of a financial professional. That combination, low test scores paired with high self-assessed confidence, is where real money gets left on the table. Knowing you do not know something is at least a starting point. Not knowing what you do not know is how a fixable problem becomes a permanent one.
Financial Fragility Turns Knowledge Gaps Into Budget Emergencies
The survey explains why getting this wrong has such immediate consequences. Among those currently receiving Social Security, 61% say they could not survive financially if they missed even half of a monthly payment, and 54% of those expecting benefits in the future say the same. That is not a household with room to absorb a suboptimal claiming decision or an unexpected tax bill on benefits they assumed were tax-free.
The strain is already showing up in real behavior. Among current recipients, 52% have cut back on discretionary spending because rising living costs are outpacing their benefits, and 31% have reduced spending on essentials such as groceries and medications. These are not abstract projections. These are people actively adjusting their lives around a fixed income that is not keeping pace with what they actually spend.
The Tax Bill That Catches Retirees Off Guard
The survey’s tax findings may be the most preventable category of financial harm in the entire report. Six in ten respondents wish they had better prepared for paying taxes in retirement, and more than half of retirees say they did not consider how tax rates would affect their retirement income when they were originally planning. That oversight does not stay abstract once benefits start arriving and a portion of them turns out to be taxable.
The anxiety about taxes is not limited to those already retired. Among non-retirees, 65% say they are worried about what tax rates during retirement will do to their income, and 54% of all respondents say they would switch financial advisors for someone who could help them plan for taxes in retirement. The demand for guidance is clearly there. The planning is not catching up with it.
COLA Is Not the Inflation Hedge Most Retirees Think It Is
More than two-thirds of survey respondents believe tariffs will drive inflation beyond what Social Security cost-of-living adjustments can cover, and the lived experience of current recipients supports that concern. Those currently receiving Social Security report that their benefits cover roughly 59% of their retirement expenses, and 55% of them did not expect Social Security to be enough to cover their basic needs. The gap between what people assume the program will do and what it actually delivers is consistent across the data.
Nearly three-quarters of respondents say they are interested in learning how inflation affects the amount of Social Security they receive. That interest exists alongside a significant knowledge gap about how the adjustment mechanism actually works, what it measures, and what it does not measure. Wanting to understand something and actually understanding it are two different positions, and the survey data suggests most Americans are firmly in the first camp.
Acting on Confidence Without Checking the Facts Is the Costliest Mistake of All
The survey closes a loop that the data opens from the very first question. Eight in ten respondents say they want to understand how to maximize their Social Security benefits, and nearly 3 in 5 say they would be interested in talking to a financial professional to navigate potential cuts to the program. The appetite for better outcomes is real. But wanting a better result and knowing how to get one are not the same thing, and the 21% correct identification rate on full retirement age suggests most people are starting from a significant deficit.
Eighty percent of respondents agree that the Social Security system needs to change, and only 43% believe the government will actually fix it. That distrust is not irrational, given what the survey reveals about how the program is already falling short for current recipients. Practically, it means that the gap between what Social Security provides and what retirement actually costs is one that individuals will increasingly have to close themselves, and that starts with knowing the rules.
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