There's a good chance Social Security will play a big role in your retirement finances, the same way it serves as a key source of income for millions of older Americans today. For this reason, it's important to make sure you're making a smart filing decision.
You may be gearing up to claim benefits once 2026 arrives. But if so, it's important that you not buy into these big myths.
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1. Social Security is going bankrupt, so you should claim benefits as early as possible
One major fear among workers and retirees alike is that Social Security is running out of money and won't be able to pay benefits for much longer. If you buy into that myth, you may decide to claim Social Security as early as possible -- which is age 62 -- to get your money before it runs out.
But one thing you need to know is that Social Security is not on the verge of bankruptcy. In fact, the program can't run out of money because it has an ongoing revenue stream -- payroll taxes.
The one thing that is true about Social Security's shaky finances is that benefit cuts are a possibility in the future. But filing early won't make that situation better. If anything, it might make it worse.
Let's say you're entitled to a $2,000 monthly Social Security benefit at a full retirement age of 67. But let's say you turn 62 in 2026 and sign up for benefits then. If so, you'll reduce your monthly checks to about $1,400.
If Social Security then cuts benefits broadly by 20%, you'll get 80% of your $1,400 monthly check -- not 80% of $2,000. So all told, you'll be shorting yourself on monthly income either way.
And also, Social Security cuts are not a given. Lawmakers recognize how disastrous they have the potential to be, so there's a good chance they'll do whatever it takes to prevent them. Or at least we can hope.
2. You need to stop working as soon as you start getting your Social Security checks
You might assume that once you start collecting Social Security, you're no longer allowed to bring home a paycheck from a job. But that's not true at all.
If you work and collect Social Security before reaching full retirement, you'll be subject to an earnings test. And exceeding its limits could mean having some benefits withheld and repaid to you later. But you shouldn't necessarily rush to quit your job if you'll be claiming Social Security in 2026, especially if you won't be filing ahead of full retirement age.
In 2026, you can earn up to $24,480 without having any Social Security withheld, or up to $65,160 if you'll be reaching full retirement age later in the year.
3. You don't have to consider delaying your claim if you have plenty of retirement savings
If you've managed to save decently for retirement and are reaching full retirement age in 2026, you might assume that it pays to sign up for Social Security. But delaying your claim could pay off, even if you have income outside of Social Security.
For each year you delay your filing past full retirement age, your monthly Social Security benefits get an 8% boost, up until age 70. So if you're eligible for $2,000 a month at 67, filing at 70 gives you $2,480 a month instead.
Even if you have a pretty robust nest egg, there's no guarantee that you won't outlive your savings. But you can't outlive Social Security, because the program is designed to keep sending you monthly checks for the rest of your days. And the larger those monthly payments are, the more options you might have over time, especially if you end up living a lot longer than expected.
Being well-informed on Social Security could help you avoid a big filing mistake. If you're planning to claim benefits in 2026, make sure you're doing so for the right reasons. Don't rush to sign up because you fear Social Security is going away, and don't assume you have to give up your job. Also consider the upside of delaying your claim, even if you've set yourself up with a nice IRA or 401(k) to supplement your monthly checks.
