67 million people received Social Security benefits in 2017. However, despite many retirees relying on their Social Security income, often they don’t fully understand the benefits they receive through their social security check. In the United States, there are many misconceptions about the U.S. government’s pension scheme we want to shine a light on. Read here for a breakdown of the top 7 myths surrounding Social Security benefits.

The Top 7 Social Security Myths and What You Can Do Instead to Benefit More From Your Social Security


Social Security Myth #1: Social Security Benefits Derived From Wages You Earn Before Retirement Age

This is the most common social security myth. Your benefits are actually calculated using your highest 35 years of income. These 35 years of paying into your social security account do not need to be consecutive. Nor do they need to take place before you reach retirement. If you work past 65, the social security department will consider those years as much as the summer you spent working at the pizza parlor when you were 16 years old.

What Happens If You Haven’t Paid in Social Security in 35 Years?

If you don’t have 35 years of earnings, you’ll have some $0 periods factored into your social security benefits calculation. For some people, working beyond 65 will actually be an advantage.


Social Security Myth #2: The Earlier You Claim Your Social Security, the Better Your Benefits Will Be

Yes, you can begin receiving a check from social security at age 62. This action may reduce your monthly social security benefit amount by as much as 30%. It’s better to wait until your full retirement age (FRA) to receive 100% of what’s yours.

Delaying Your Full Retirement Age (FRA)

The current full retirement age is 66 or 67, depending on your birthday. The Social Security Administration (SSA) will give you an extra 8% every year you delay past the full retirement age up to 70.

Are you healthy enough and have a good job? Delaying your FRA may be the better option.

Benefits of Starting with a Smaller Social Security Check

Keep in mind that the government’s yearly cost-of-living adjustment (COLA) is based in part on the social security benefit amount. Start with a smaller social security check which will result in a lower COLA benefit, further penalizing you for taking an early retirement.


Social Security Myth #3: Social Security Benefits Aren’t Taxable

You won’t be taxed if social security benefits are your only source of income. However, if you have other sources of income, such as dividends, retirement account distributions, etc., then your social security check could become taxable. The amount of the check that’s taxable in this situation could be as high as 85%.


Social Security Myth #4: If I Get Divorced, My Social Security Benefits Will Be Reduced

If you were married for at least 10 years and you are at least 62 years old, then you can collect benefits based on your ex-spouse’s work record. This does not affect your ex-spouse’s social security benefits, nor will they be notified that you filed.

It’s perfectly legal to claim social security benefits based on your own record or an ex spouse’s. Some people may find it advantageous to receive social security benefits based on an ex spouse’s history rather than their own, depending on which option would produce the larger benefit. Be aware, however, that if you remarry, the right to claim the spouse’s record evaporates.


Social Security Myth #5: It’s Not Possible to Recoup the Money You Contributed to the Social Security Program

This is a common misconception. The older you get, the more social security benefits you’ll accrue. The Social Security Administration does not offer a break-even calculator, so there’s no method to determine an exact figure.


Social Security Myth #6: Once You Begin Receiving Social Security Benefits, You Can’t Stop Them

Depending on your situation, you may be able to make changes to your social security benefits. If necessary, you can start receiving social security benefits and then stop within the first 12 months. In this situation, you need to notify the SSA, withdraw your application, and repay the social security benefits you have received. You can file again later.

If the twelve months have passed and you haven’t reached full retirement age, there’s nothing you can do at this point. However, if you have reached FRA but are still less than 70 years old, you can put the brakes on. This is called a voluntary suspension.

If you elect to take this route, you will begin earning delayed retirement credits. These will allow you to get a bigger monthly check when you apply again in the future.

One caveat is in order here: If you do take a voluntary suspension, any spousal social security benefits would also end.


Social Security Myth #7: I Can’t Work Once I Begin Receiving Social Security Benefits

People often think they must stop working once the government starts sending a check. This is not true. You can work while you receive social security retirement (or survivors) benefits.

Understanding social security and knowing when to take it isn’t a choice to take lightly.  For most people, it’s one of the most valuable retirement assets they have.


If you have any questions about maximizing your social security benefits, contact our financial retirement planning expert team today!