Five Social Security Myths Busted

Five Social Security Myths Busted

Contributed by Kennon Belisle

Claiming social security is often complicated.  A recent count showed there are 2728 rules which govern how and when you can collect, how your benefits are determined, and there are many claiming strategies.  In fact, did you know that 96% of American’s don’t maximize their social security benefit, according to a 2019 survey from United Income.  Let’s look at some of the confusion that is out there.

Myth 1: Age 70 is the best age to collect social security.  While delaying until age 70 will maximize your individual monthly benefit it may not be the best age for you.  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.

Myth 2: 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 full retirement age, 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 3: 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 single or married filer.   There are also some states that tax Social Security.

Myth 4: 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 5: 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 retires 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.

When it comes to claiming Social Security benefits, knowing when to claim and which strategy to use does not have to be done in the dark.  As a Registered Social Security Analyst (RSSA), I can help you achieve the optimal claiming strategy to ensure that you receive every dollar that you have earned and are entitled to.  I can analyze all possible claiming options including your most optimal strategy and I will create your personal Social Security benefits plan which will include claiming strategy options, future earnings impacts, strategies to avoid reduced benefits, maximizing spousal and survivor benefits longevity scenarios, cost of living adjustments, pension reduction calculations and more. 

Just call my office and make an appointment with Capital Wealth Management. Call 907-562-9572.  Kennon Belisle, CFP®, ChFC®, AIF®, RSSA.

Advisory services offered through Lincoln Investment or Capital Analysts, Registered Investment Advisers. Securities offered through Lincoln Investment, Broker Dealer, Member FINRA/SIPC. www.lincolninvestment.com Capital Wealth Management, Inc. and the above firms are independent and non-affiliated. Social security claiming advice is not offered through, or supervised by, The Lincoln Investment Companies.