Posted on January 19, 2017 in

Five Social Security Myths

Will you be collecting social security this year? While it’s a very valuable benefit, it can also be a complicated one. There is misinformation out there and complex benefits formulas. Before you make a decision about claiming Social Security, let’s clear up some myths and get the facts.

 Myth 1: You must claim benefits at age 62

Fact: Age 62 is the earliest you can claim Social Security, but not the “only” age. The year you were born determines your (FRA) “Full Retirement Age.” If you claim before this time, you lock in a permanent reduction in monthly income. Waiting to claim social security after FRA comes with an 8% bonus every year. If you’re thinking of claiming early, you may consider maximizing your income for a retirement that could last longer than 30 years.


Myth 2: Claim early and increase later

Fact: If you start claiming at age 62, checks won’t increase when you reach your FRA. Once you’ve claimed social security, you can’t bump up income. You do get a yearly cost of living adjustment, but no increase when you hit your FRA. Spouses with lower incomes may get a “top up” or “auxiliary” benefit, but you still have to wait until your FRA to claim this benefit.


Myth 3: Your ex-spouse can deny your benefits

Fact: An ex-spouse has no influence over your benefits. If you were married 10 consecutive years and are not re-married, you are entitled to either your own benefit or 50% of your ex’s social security benefit. You’re entitled to which ever benefit is higher after reaching your FRA. You can bring marriage and divorce documents to the Social Security Administration office to submit the claim.


Myth 4: Your benefits are only based on what you earned before 65.

Fact: Your benefits are calculated based on your highest “35 years” of earnings. If you work past 65, those earnings will be included as long as they remain part of your highest 35 years. This includes working part time after turning 65. The years don’t have to be consecutive.


Myth 5: You’ll never get “all” the money you put in.

Fact: Many will and some people may get more than they contributed if they live a long life. Every situation is different. While the government does not have a specific amount held just for you, social security does provide an “inflation-protected guaranteed income” stream in retirement, ensuring against the risk you will outlive your savings. Even if you live to age 100 or older, you’ll still receive income every month. If you lose a spouse, you’ll also receive survivor benefits.

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Source: Fidelity Investments