Have You Heard These Social Security Myths?

As you plan for retirement, you will face a number of big decisions. But none are so complex as the ones surrounding your Social Security benefits. The number of rules, regulations, and loopholes surrounding Social Security is confusing enough, but then you also have to deal with persistent rumors and urban myths surrounding your benefits! It’s no wonder some people have no idea what to expect from the system. Before making any big decisions about your retirement, make sure you know the truth about these common Social Security myths.

Social Security is running out of money, so I should claim my benefits now! This rumor arose from common news reports that the Social Security trust fund is running out of money. That much is true, but two-thirds of Social Security benefits are not paid from this fund anyway. Benefits are mostly paid from current intake of FICA taxes. If the system isn’t fixed by about 2034, then your benefits could be reduced by one-third. But politicians and lobbyists are working hard to close the gap.

I won’t receive Social Security benefits because I’m divorced. If you don’t have enough work credits to qualify for Social Security on your own, then you have always relied upon your spouse’s work record. But when you get divorced, that doesn’t mean you won’t be able to claim spousal benefits. As long as you were married for at least 10 years and are currently single, you can still file for spousal benefits on your former spouse’s work record.

Social Security benefits are tax-free! Unfortunately, no, they aren’t. Up to 85 percent of your Social Security benefits can be taxed, depending upon your modified gross income and tax filing status each year.

If I work while receiving benefits, my checks won’t be affected. This one is partially true. If you wait until your full retirement age to claim your benefits, you can continue to work and earn as much money as you want. Your checks will not be reduced for this reason. But if you claim your benefits early, before reaching full retirement age, then your checks can be reduced depending upon how much money you make.

If I file for benefits and regret my decision, there is nothing I can do. Actually, you can withdraw your application for benefits at any time. You will have to repay all benefits you have received, but then you can wait a few more years to file if you choose to do so.

As always, remember that you can call our office with any questions you might have about Social Security or any other retirement planning issue.

This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency

15160 – 2015/12/10