A Government Accountability Office (GAO) review of nine surveys and academic studies, and interviews with retirement experts, suggest that many individuals do not fully understand key details of Social Security rules that can potentially affect their retirement benefits.

As an example, GAO noted, while some people understand that delaying claiming leads to higher monthly benefits, many are unclear about the actual amount that benefits increase with claiming age.

The studies and surveys also found widespread misunderstanding about whether spousal benefits are available, how monthly benefits are determined, and how the retirement earnings test works. GAO says understanding these rules and other information, such as life expectancy and longevity risk, could be central to people making well-informed decisions about when to claim benefits. By having this understanding of retirement benefits, people would also be in a better position to balance other factors that influence when they should claim benefits, including financial need, poor health, and psychological factors.

GAO observed 30 in-person claims at Social Security Administration (SSA) field offices and found that claimants were not consistently provided key information that people may need to make well-informed decisions. For example, in eight of 26 claims interviews in which the claimant could have received higher monthly benefits by waiting until a later age, the claims specialist did not discuss the advantages and disadvantages of delaying claiming. Further, only seven of the 18 claimants for whom the retirement earnings test could potentially apply were given complete information about how the test worked.

GAO noted that SSA’s Program Operations Manual System (POMS) states that claims specialists should explain the advantages and disadvantages of filing an application so that the individual can make an informed filing decision. The problems GAO observed during the claims interviews occurred in part because the questions included in the claims process did not specifically cover some key information.

Online applicants have more access to key information on the screen or through tabs and pop-up boxes as they complete an application, GAO found. However, similar to in-person interviews, the online application process does not inform claimants that benefits are based on the highest 35 years of earnings or that life expectancy is an important consideration in deciding when to claim.

GAO is making six recommendations to SSA, including that SSA take steps to ensure that claims specialists provide information on delayed benefits that is consistent with POMS, and that the claims process provides claimants better information about the retirement earnings test. The agency said SSA generally agreed with its recommendations.

The full GAO report may be accessed here. The GAO testified about its findings during a hearing before the U.S. Senate Special Committee on Aging this week.