Social Security serves as a key source of income for millions of retired seniors. If you're counting on those benefits to help pay the bills in retirement, then you'll need to get your facts straight on how the program really works. Here are a few misconceptions you can't afford to buy into.

1. You must file for benefits once you reach full retirement age

Workers are often advised to wait until full retirement age to claim Social Security. The reason? Doing so ensures that you'll get the full monthly benefit you're entitled to based on your earnings record. Filing ahead of full retirement age, on the other hand, results in a reduction in benefits.

Your full retirement age is based on your year of birth, as follows:

Year of Birth

Full Retirement Age




66 and 2 months


66 and 4 months


66 and 6 months


66 and 8 months


66 and 10 months



Data source: Social Security Administration.

That said, you don't have to take benefits once you reach full retirement age, and if you delay past that point, you'll accrue credits that increase your payments by 8% for each year you hold off. This incentive only lasts until age 70, but it's still a good opportunity to boost your benefits and collect a higher payout for life.

Senior couple hiking in the woods.

Image source: Getty Images.

2. You can live off Social Security alone

It's no secret that Americans are glaringly behind on retirement savings, with nearly half of U.S. households having no nest egg to speak of. And while part of that boils down to maxing out their paychecks on living expenses, it's also a matter of misaligned thinking -- namely, that Social Security will be enough to cover the bills in retirement.

Contrary to what you may have heard, the typical senior can't live off Social Security alone. At present, the average monthly benefit is just over $1,400, which amounts to less than $17,000 a year of income. Given that healthcare alone might eat up half of that sum, the need for independent savings should be pretty clear.

Let's also not forget that most recipients wind up filing for Social Security at 62, thereby slashing their benefits. If you're planning to go this route, you'll have even less income at your disposal once you leave the workforce for good.

Now this isn't to say that Social Security can't, or shouldn't, be factored into your retirement budget. Rather, be realistic about what it will represent. If anything, those benefits should be used as a means of supplementing your personal savings -- not replacing them entirely.

3. You should claim benefits early because they might be going away

For years, rumors have been floating around warning of Social Security's pending demise. But while it's true that future recipients might see a decrease in benefits, the program is by no means going away. Therefore, if you're planning to file for benefits as early as possible (age 62) to avoid losing out on that income completely, don't buy into that line of thinking.

Remember, Social Security can never truly go broke, and the reason is that it's funded by payroll taxes. Therefore, as long as we have a workforce, the program can continue. That said, Social Security is facing a serious shortfall, and if Congress doesn't address it by the time the program's trust funds run dry, future recipients might see lower payouts. As per the latest projections, those trust funds will be depleted come 2034, at which point benefits could be cut by up to 23%.

Is that good news? Obviously not. But keep a couple of things in mind. First, there's a key difference between losing out on some benefits versus having them go away completely. Secondly, countless seniors risk falling well below the poverty line if their benefits are cut significantly, so the chances of Congress sitting back and letting that happen are relatively low. Therefore, you shouldn't rush to file for benefits early unless you have a good reason to do so.

No matter your age, it pays to be well-informed about Social Security so you can maximize your benefits when the time comes to claim them. So don't believe the various myths you hear about the program. Rather, do your own research and arm yourself with knowledge. You'll be thankful you did once the time comes to retire.