Social Security Myths Impacting Boomers

Social Security is a crucial part of retirement planning, yet it’s surrounded by misconceptions. How much do you really know about your benefits?

#1. Social Security Is Going Bankrupt

Image Credit: Shutterstock / Inside Creative House

It’s not going bankrupt; Social Security funds are projected to be sufficient until 2034. After that, the system can still pay 79% of benefits even without further reforms.

#2. You Should Claim Benefits at 62

Image Credit: Shutterstock / fizkes

Claiming as soon as you’re eligible at 62 means your benefits are reduced for life. Delaying your claim increases your monthly benefits.

#3. Social Security Is Tax-Free

Image Credit: Shutterstock / Zerbor

Not quite—depending on your combined income, up to 85% of your Social Security benefits may be taxable.

#4. Benefits Are Based on Last Years of Work

Image Credit: Shutterstock / smolaw

Your benefits are calculated based on your 35 highest-earning years, not just your last few years of employment.

#5. It’s Best to Work as Long as Possible

Image Credit: Shutterstock / Bojan Milinkov

While working longer can increase your benefit amount, it’s not always necessary. Once you’ve reached your 35 highest-earning years, additional work may not significantly boost your benefits.

#6. You Can’t Work While Receiving Social Security

Image Credit: Shutterstock / fizkes

You can work while receiving benefits, but if you’re younger than full retirement age, there’s a limit on how much you can earn before it affects your benefits.

#7. Social Security Only Helps the Elderly

Image Credit: Shutterstock / Pixel-Shot

Social Security also provides survivor benefits, disability benefits, and benefits for dependents.

#8. The Money You Put In Is What You Get Out

Image Credit: Shutterstock / Andrey_Popov

Social Security is not a personal savings account but a pooled fund that provides a safety net based on your earnings history.

#9. All States Treat Social Security the Same

Image Credit: Shutterstock / William Potter

Thirteen states tax Social Security benefits, so where you live can affect your net income from Social Security.

#10. There’s a Best Age for Everyone to Claim Benefits

Image Credit: Shutterstock / Rawpixel.com

The best age to claim benefits depends on individual circumstances, including health, financial needs, and employment status.

#11. Married Couples Get Double Benefits

Image Credit: Shutterstock / fizkes

Each individual’s benefit is calculated separately. Couples can strategize their claims to maximize household income, but they don’t automatically receive double benefits.

#12. Divorcees Lose Benefits

Image Credit: Shutterstock / Freedomz

If your marriage lasted 10 years or longer, you might be eligible for benefits based on your ex-spouse’s earnings, even after divorce.

#13. Children Can’t Receive Social Security

Image Credit: Shutterstock / Pormezz

Dependent children and, in some cases, grandchildren can receive benefits if a parent or grandparent retires, becomes disabled, or dies.

#14. Social Security Is Only for Retirement

Image Credit: Shutterstock / MOUii

Besides retirement, Social Security provides disability insurance and survivor benefits, which protect you and your family from different life events.

#15. You Get More Over Time by Claiming Early

Image Credit: Shutterstock / Miha Creative

Claiming early reduces your monthly benefit amount permanently. Over time, claiming later usually results in receiving more total benefits.

#16. Benefits Are the Same Nationwide

Image Credit: Shutterstock / bearinmind

The amount you receive can vary based on your earnings record, when you claim benefits, and where you live, due to state taxation.

#17. Social Security Can Fully Fund Retirement

Image Credit: Shutterstock / Rawpixel.com

Social Security is designed to replace only about 40% of the average retiree’s pre-retirement income. Most people will need additional savings.

#18. It Doesn’t Matter When You Claim If You’re Healthy

Image Credit: Shutterstock / fizkes

Even if you’re in good health, claiming later can provide more financial security as you age, especially if you live longer than expected.

#19. You Must Be a U.S. Citizen to Collect

Image Credit: Shutterstock / Ground Picture

Non-citizens who are legal residents and have worked legally in the U.S. can qualify for Social Security benefits.

#20. My Benefit Amount Is Fixed When I Retire

Image Credit: Shutterstock / wutzkohphoto

Your benefits can increase after you start receiving them due to annual cost-of-living adjustments (COLA) based on inflation.

Understanding Your Options

Image Credit: Shutterstock / Roman Samborskyi

Understanding the realities of Social Security can help you make informed decisions that maximize your benefits and secure your financial future. Don’t let myths cloud your planning—get the facts, and plan accordingly for a stable and fulfilling retirement.

The post Social Security Myths Impacting Boomers first appeared on Career Step Up.

Featured Image Credit: Shutterstock / J.J. Gouin.

The content of this article is for informational purposes only and does not constitute or replace professional financial advice.

For transparency, this content was partly developed with AI assistance and carefully curated by an experienced editor to be informative and ensure accuracy.

+ posts

Leave a Comment