Social Security seems simple. But this retirement benefit is in fact quite nuanced, with many variables to consider–including when to start collecting, how to maximize your benefit, and what to do if you choose to go back to work.
Here, we shine some light on common Social Security misconceptions to help get the most from your hard-earned benefits.
The Top 7 Social Security Myths
Myth #1: SOCIAL SECURITY WON’T BE AROUND
Social Security is replenished by Americans, interest on US bonds, and taxes on some retiree benefits. Should the existing surplus be depleted, future retirees may be paid a portion of the benefits promised, but not zero.
Myth #2: SOCIAL SECURITY IS ALL YOU NEED
While Social Security benefits are adjusted for cost of living increases, they’re intended to supplement, not replace, retirement savings. That’s why it’s important to maximize your retirement savings for as long as possible.
Myth #3: ALWAYS FILE AS EARLY AS POSSIBLE
Filing for your Social Security benefits before your full retirement age (FRA) will begin benefits sooner but reduce their amount, which may not be optimal. Higher-earning spouses often delay benefits to ensure a higher payout for their widow or widower, who would be eligible for 100% of their benefit.
Myth #4: ALWAYS FILE AS LATE AS POSSIBLE
Waiting to file for your Social Security benefits past your full retirement age (FRA) often makes the most sense financially. But, some conditions warrant filing early, particularly if you need the extra income, have health concerns or want the payments during your younger years.
Myth #5: NO WORK EXPERIENCE, NO BENEFITS
Those who haven’t worked for 40 quarters can receive half of what a spouse or ex-spouse would receive (if you were married over 10 years and haven’t remarried). Surviving spouses and exes may also be eligible for full benefits on their spouse’s record.
Myth #6: NEVER WORK AFTER FILING
If you file for Social Security Benefits early and continue to work, your benefits will be reduced based on your earnings. But those benefits are simply delayed; at your full retirement age (FRA), you’ll receive increased payments to make up the difference.
Myth #7: RELY SOLELY ON ADVICE FROM FRIENDS AND FAMILY
Advice from non-professionals may not maximize Social Security benefits. Contact your financial advisor at Signature Wealth Strategies to address your specific circumstances, and develop a plan to get the most from your Social Security benefits.
Do you want to get the most out of your hard-earned Social Security benefits? Contact us today and we’ll show you how.