Many seniors would struggle financially if it weren't for Social Security. But to really make the most of the program, you'll need to understand its ins and outs. Here are a few commonly misconstrued facts about Social Security that could cause you to wind up shortchanged.

1. It doesn't matter when you file for benefits

Eligible seniors are given an eight-year window to sign up for Social Security that begins at age 62 and ends at 70. (Technically, you don't have to file by 70, but there's no financial reason not to.) You may have heard that the program is designed to pay you the same total lifetime benefit regardless of when you first file, and that's actually true.

For example, claiming benefits at 62 means collecting a lower benefit each month because you're only eligible to collect your benefits in full once you reach full retirement age (FRA). However, filing at 62 also means getting anywhere from 48 to 60 more individual payments, depending on your specific FRA, so the logic is that your reduced benefits will be offset by that greater number of individual payments.

Older man reading a newspaper outdoors.


The same holds true if you hold off on filing past FRA, thereby boosting your benefits by 8% a year up until age 70. While you'll increase the amount you receive from Social Security each month, you'll also collect fewer payments, thereby making it a relative wash.

The whole concept of breaking relatively even regardless of when you first file, however, depends on how long you ultimately live. Therefore, if your health is great, it often pays to delay benefits as long as possible because you'll come out ahead financially if you end up living a longer life than the average senior. On the flip side, if your health is in bad shape, you'll generally get more money out of Social Security by filing on the earlier side.

Of course, your health is just one factor to consider when claiming benefits. The point, however, is that it actually does matter when you first sign up for Social Security, so be sure to weigh the pros and cons of filing at various ages.

2. You can't collect benefits if you never worked

To be eligible for Social Security, you must accrue 40 lifetime credits, the value of which changes from year to year but is based on a predetermined level of earnings. Therefore, if you never worked and therefore never paid into the system via Social Security taxes, you might assume that you won't be able to collect benefits once you're older.

But that's not so. If you're married to someone who's eligible for Social Security, you're entitled to spousal benefits that total as much as half of what your spouse collects. In other words, if your spouse starts getting $2,000 a month from Social Security, you'd generally be entitled to $1,000 a month.

Furthermore, you don't actually need to be married to capitalize on spousal benefits. In some cases, you can collect benefits based on a former spouse's work record, even if you've since divorced.

3. Once you file, you can't undo your claim

The danger in filing for Social Security ahead of full retirement age is that by doing so, you risk locking in a lower monthly payment for life. And as we've just learned, if you end up living well into your 90s, that could cause you to get seriously shortchanged in the long run.

But one thing many people don't realize about Social Security is that the program offers a single do-over. If you file for benefits early and then realize you made a mistake or that you no longer need the money, you have the option to withdraw your application and start fresh at a later point in time. To do so, however, you'll need to undo your benefits claim within a year and also pay back every dollar you collected in benefits to the Social Security Administration. But if, say, you initially filed at 62 because you lost your job and needed money, only to become re-employed three months later, you can essentially cancel your benefits and hold off until FRA or beyond to secure a larger monthly payment.

The more educated you are about Social Security, the more you'll be able to maximize your benefits. If you avoid falling victim to these misconceptions, you'll be better positioned to walk away with more money in your lifetime.