Stony Brook University College of Business announced the results for the second installment of the Stony Brook Poll today. The Poll, conducted in association with Left Right Research, a Long Island based Marketing Research supplier, examined Americans understanding of their lifetime contributions toward Medicare and Social Security. This topic is consistent with the general intent of the poll that is to consider timely topics that examine how well Americans understand money, financial systems and financial math.
“Many people seem to think that they have contributed significant amounts of money to both Medicare and Social Security, and therefore are concerned and even angry that the programs may not have enough funds to support them when they are needed in retirement.” Said Dr. Michael A. Kamins, Director of Research at the College of Business at Stony Brook University. “It is important to examine in an empirical context whether such observations are indeed true, and if they are, then the onus may lie on Federal and State Agencies to communicate basic facts to the public regarding how inputs into either system are significantly lower than outputs, hopefully influencing consumer usage and behavior as well as public policy.”
Second Stony Brook Poll Results: Medicare and Social Security
Just shy of 7,000 individuals surveyed nationally responded to questions about their lifetime contributions to Medicare and Social Security. Specifically respondents were asked: “Speaking about Social Security (Medicare), do you believe that over the course of your career you have paid: (a) “More in than I will receive”; b) “Enough to support myself” or c) “Not enough, others will have to support me”. Regarding social security, results showed that over 81% of those surveyed believed that they had contributed enough to support themselves or more than they will receive during their lifetime. The numbers were similar for Medicare, approaching 80%.
When asked about how much they believed they had contributed to either Medicare or Social Security during their best paid year, over 2 in 5 individuals surveyed were off by 50% or more regarding Social Security contributions while over half were off by 50% or more regarding Medicare. Amazingly, regarding Medicare, approximately 3 individuals out of ten were off by over 100% in terms of their contributions to Medicare during their career year. Finally, when asked if they were confident or “just guessing” regarding their response to the above questions, approximately 2 out of three individuals indicated that they had simply guessed.
The data from the Stony Brook Poll suggests three key implications. First, the high guess rate in terms of the findings related to Medicare and Social Security implies a general lack of knowledge among the populace which can either be attributed to a lack of interest or a lack of dissemination of relevant information by government officials or journalists. In other words, the government and journalists have failed in communicating relevant information to the general public.
Second, it also implies a great need for information dissemination so as to inform and motivate the consumer about the actual costs of Medicare and Social Security so as to spur changes in comprehension for future generations.
Finally, there appears to be a massive failure of the educational system and a need in our schools to focus on financial math literacy. Given the dramatic disconnect between what people believe and what is actually true in matters related to money, such an education could help make individuals better decision makers and help contribute to more impactful public policy recommendations.
About Stony Brook University College of Business Stony Brook University's College of Business is one of the leading business programs in the world. Students come from around the corner, around the globe, to participate in an integrated curriculum that combines classroom and real-world learning. The College of Business provides comprehensive education and research for the business, public, and nonprofit sectors. Our programs are taught by senior Stony Brook faculty with decades of experience. They are complemented by key executives recruited as visiting professors from throughout the tri-state region-industry leaders who have built stellar careers in today’s global business world. Both our MBA and our undergraduate students complete our programs as leaders ready to take on the complex challenges of the business world.
About Left Right Research LLC Left Right Research offers an innovative web-based research methodology that gauges “top view” consumer attitudes and insights. By removing biases within its survey methodologies, Left Right provides more accurate and much clearer insights into consumer thinking, resulting in powerful value for its clients. Learn more about Left Right Research at www.leftrightresearch.com.
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Center for Behavioral Finance launches website: The Center for Behavioral Finance at Stony Brook University brings together researchers from different disciplines to conduct research in behavioral finance. We aim at producing cutting-edge research in all fields of behavioral finance and (financial) decision making, mostly using experiments, publishable in top-tier journals in finance, judgment and decision making and psychology.