Nearly half of married couples and a whopping 69% of unmarried Americans depend on Social Security benefits for at least 50% of their income during retirement, according to the Social Security Administration.

That's no surprise, considering most people are falling behind on their savings -- in fact, a third of Americans have less than $5,000 stashed away for retirement, according to Northwestern Mutual. Without savings of their own, retirees must turn to Social Security benefits just to scrape by.

Social Security card with a hundred dollar bill

Image source: Getty Images

Social Security can be a confusing topic and there are several myths pervading the system. Although these untruths may seem harmless, people who plan to rely on Social Security benefits to make ends meet during retirement, must understand how the program works, at the risk of losing out on thousands of dollars over their lifetime.

Myth no. 1: It doesn't matter what age you claim benefits.

One of the biggest factors that determines how much you'll receive each month in Social Security benefits is the age at which you begin claiming your benefits. The earliest you can claim is age 62, but if you do claim that early, your benefits will be reduced by up to 30%. In order to receive your full benefit amount you have to wait until you reach your full retirement age (FRA), which is either 66 or 67, depending on the year you were born. If you delay claiming benefits until after your FRA (up to age 70), you'll receive a bonus on top of your full benefit amount that helps make up for the months you weren't receiving benefits.

The system is designed so that, in theory, you'll receive the same amount over your lifetime regardless of when you claim. If you claim early, you'll receive more checks overall -- but they'll all be smaller. If you delay claiming by a few months or years, you'll receive fewer (but fatter) checks.

However, that system isn't perfect, and there's no one-size-fits-all answer for when you should claim -- it depends on your unique financial situation.

Say, for example, your FRA is 67, and the full amount you're entitled to if you claim at that age is $1,300 per month (which is how much the average beneficiary receives). If you claim at 62, your benefits will be cut by 30%, leaving you with $910 per month. Wait until 70 to claim, though, and you'll receive a 24% bonus on top of your full amount, giving you a total of $1,612 per month. If your personal savings aren't where you want them to be and you know you're going to be depending on Social Security benefits to make ends meet during retirement, that extra $500 per month can go a long way and is worth waiting for.

Myth no. 2: If you claim early, your benefits will increase once you reach your FRA.

Some people may choose to claim before they reach their FRA because they think the cut in benefits will only be temporary. However, if you claim early you're stuck with those smaller checks for life. Likewise, if you delay claiming benefits and receive a bonus on top if your full amount, you'll be receiving bigger checks for the rest of your life.

Again, while the system is designed so that you'll theoretically receive the same amount over a lifetime no matter when you claim, sometimes you can come out ahead by claiming at a certain age.

Using the previous example, say your FRA is 67 and you'd be receiving $1,300 per month by claiming at that age, compared to $910 per month by claiming at 62 and $1,612 per month by claiming at 70. Here's what your total lifetime benefits would look like over time depending on whether you claim at 62, 67, or 70: 

Age at Death Total Lifetime Benefits When Claiming at 62 Total Lifetime Benefits When Claiming at 67 Total Lifetime Benefits When Claiming at 70
62 -- -- --
67  $54,600 -- --
70 $87,360 $46,800 --
75 $141,960 $124,800 $96,720
80 $196,560 $202,800 $193,440
85 $251,160 $280,800 $290,160

Source: Author's calculations

So if you expect to live until around age 75, it may be a good idea to claim earlier rather than later -- you'll receive more money over a lifetime than if you wait to claim. However, if you have reason to believe you'll live into your 80s or beyond (which is a very real possibility, as one in four 65-year-olds today can expect to live past age 90 according to the Social Security Administration), then it might be a better idea to hold off on claiming your benefits for as long as possible.

Of course, nobody can predict exactly how long they'll live, but even a rough estimate can help you determine when the best time is to claim.

Myth no. 3: You have to claim benefits as soon as you retire.

While retirement and claiming benefits often go hand in hand, they don't have to happen simultaneously. In fact, it's possible to start claiming benefits while you're still working, or retire first and claim benefits later.

For instance, if you want to retire gradually by leaving your full-time job and picking up a part-time position, you may need your benefits to fill the financial gaps if you don't want to dip into your own nest egg just yet. Or if you have a healthy retirement fund and can afford to live off of that alone for a few years, you may choose to leave your job and delay claiming benefits until age 70 to take advantage of those bigger checks.

One thing to keep in mind, though, is that if you're working while receiving benefits you may receive less from Social Security depending on your age and how much income you're earning. If you've already reached your FRA, this doesn't apply to you -- you'll still earn your full benefit amount no matter how much you're earning. But if you claim earlier than your FRA, your benefits may be reduced because you're still earning income from work.

If you're working and you won't reach your FRA this year, your benefits will be reduced by $1 for every $2 you earn above the yearly income limit, which for 2018 is $17,040. If you will be reaching your FRA this year, your benefits will be reduced by $1 for every $3 above $45,360 up until the month that you reach your FRA.

So let's say, for instance, your full benefit amount is $1,300 per month (or $15,600 per year), and you're earning $30,000 per year working part-time. In the years leading up to your FRA, your benefits will be reduced by $6,480 each year, leaving you with just $9,120 per year (or $760 per month). But in the year you reach your FRA, your benefits won't be reduced at all because you're earning less than the $45,360 limit.

Keep in mind, though, that these reductions are only temporary. Once you reach your FRA, you'll start receiving bigger checks to make up for the money you weren't receiving before. So that money isn't necessarily lost; it's simply delayed.

Social Security has a lot of ins and outs that can be difficult to fully understand. While you don't need to be a Social Security guru and master every detail, it is important to have at least a basic understanding of how the program works in order to make the most of it.

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