The 3 Biggest Social Security Myths

Clearing up these three misconceptions could help you maximize your retirement benefits.

Aug 30, 2014 at 6:30PM

I recently had the pleasure of talking with one of the country's top retirement experts, and I came away with several ideas to maximize my Social Security benefits -- oh, and probably yours as well.

Three misconceptions
Jean Setzfand is the vice president of financial security at AARP in Washington, D.C. During our chat, I asked her about some of the biggest misconceptions people have about Social Security. She told me they center on some frequently asked questions:

  • I'm divorced. Is it possible my ex-spouse could delay or lower my benefits?
  • If I work too much, will I lose Social Security benefits?
  • Is delaying my benefits always the best way to increase my Social Security income?

Here's what Setzfand had to say about these Social Security myths:

Let's recap what she said.

Divorced spouses
If you have been married, or were previously married, for at least 10 years, your spouse or ex-spouse may have access to spousal or ex-spousal Social Security benefits through you. However, our ex cannot take away your benefits or reduce your benefits by tapping into his or hers early.

Here are some other things to consider, taken straight from the official Social Security website:

  • If you remarry, you generally cannot collect benefits on your former spouse's record unless your later marriage ends (whether by death, divorce, or annulment).
  • If your ex-spouse has not applied for retirement benefits but can qualify for them, you can receive benefits on his or her record if you have been divorced for at least two years.

Working after you begin to collect Social Security benefits
You cannot lose benefits by working too much after you've started collecting your Social Security income. If you earn more than a certain amount, you may be reducing your potential benefits before your full retirement age (which is between 65 and 67, depending on your date of birth), but you'll actually be "banking" those benefits and getting them back at full retirement. After your full retirement age, you can't reduce your take-home no matter how much money you make.

It's not always better to delay taking benefits
While AARP's normal advice is to delay taking your benefits as long as possible in order to maximize your monthly take-home, there are cases for dual-earning spouses when it's better to tap in earlier. If the higher-earning spouse waits for full retirement age, that person can unlock a spousal benefit for the lower-earning spouse to tap into sooner rather than later. This can give the lower-earning spouse the ability to wait and accrue maximum benefits by waiting until age 70 to tap into his or her own account.

How to get even more income during retirement
Social Security plays a key role in your financial security, but it's not the only way to boost your retirement income. In our brand-new free report, our retirement experts give their insight on a simple strategy to take advantage of a little-known IRS rule that can help ensure a more comfortable retirement for you and your family. Click here to get your copy today.

Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Money to your ears - A great FREE investing resource for you

The best way to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as “binge-worthy finance.”

Feb 1, 2016 at 5:03PM

Whether we're in the midst of earnings season or riding out the market's lulls, you want to know the best strategies for your money.

And you'll want to go beyond the hype of screaming TV personalities, fear-mongering ads, and "analysis" from people who might have your email address ... but no track record of success.

In short, you want a voice of reason you can count on.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich," rated The Motley Fool as the #1 place online to get smarter about investing.

And one of the easiest, most enjoyable, most valuable ways to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as "binge-worthy finance."

Whether you make it part of your daily commute or you save up and listen to a handful of episodes for your 50-mile bike rides or long soaks in a bubble bath (or both!), the podcasts make sense of your money.

And unlike so many who want to make the subjects of personal finance and investing complicated and scary, our podcasts are clear, insightful, and (yes, it's true) fun.

Our free suite of podcasts

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. The show is also heard weekly on dozens of radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable. Rule Breaker Investing and Answers are timeless, so it's worth going back to and listening from the very start; the other three are focused more on today's events, so listen to the most recent first.

All are available for free at www.fool.com/podcasts.

If you're looking for a friendly voice ... with great advice on how to make the most of your money ... from a business with a lengthy track record of success ... in clear, compelling language ... I encourage you to give a listen to our free podcasts.

Head to www.fool.com/podcasts, give them a spin, and you can subscribe there (at iTunes, Stitcher, or our other partners) if you want to receive them regularly.

It's money to your ears.

 


Compare Brokers