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Social Security Myths

  • Myth: Age 70 is the best age to
    collect Social Security.
    The Truth: While delaying until age 70 will maximize your individual monthly
    retirement benefit, it may not be the best age for you to collect. The optimal time
    to collect depends on many factors including, but not limited to, what benefits
    you are eligible for, life expectancy, marital status, and more.
    Social Security and its 2,728 rules are complex, so it isn’t surprising that
    there are many misconceptions and myths regarding the program. Here are
    five of the top Social Security myths and the truths behind them.
  • Myth: You can’t work while collecting
    Social Security.
    The Truth: You can still work while collecting Social Security. However, if you are
    working and younger than your FRA, you are subject to the Retirement Earnings
    Test. During this time, if you earn more than the earnings limit for that year, your
    Social Security benefit will be reduced.
  • Myth: Social Security income can’t be
    taxed.
    The Truth: Not all Social Security recipients will be taxed. If your “combined
    income” or “provisional income” exceeds a specific threshold, a portion (up to
    85%) of your Social Security will be federally taxed. These thresholds vary if you
    are a single or joint filer. There are 13 states that also tax Social Security.
  • Myth: You can’t collect benefits from
    an ex-spouse.
    The Truth: You may be eligible to collect ex-spousal benefits if you were married
    for more than 10 years, are currently single, and are at least age 62. If you have
    been divorced for less than 2 years, you must wait until your ex-spouse is
    collecting their retirement benefits for you to collect an ex-spousal benefit.
  • Myth: Social Security will soon be
    gone.
    The Truth: Social Security is a pay-as-you-go program. Payroll taxes being paid
    by workers today are used to pay for the benefits of retirees today. Additionally,
    the Social Security Trust Funds are a reserve of money to fund full benefits.
    While these funds could run out of money, there are many solutions to fix this. 
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