15 Social Security Myths You Shouldn't Believe

Many seniors depend on Social Security to stay afloat in retirement. But there's a world of misinformation surrounding the program that could lead you to make poor decisions. Here are a bunch of Social Security myths that really need to be debunked.

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Many people think they'll manage just fine on Social Security once they retire. But you should know that those benefits will only take the place of roughly 40% of your pre-retirement wages, assuming you're an average earner. Most seniors need about twice that much replacement income.

Social Security doesn't pay all seniors the same amount every month. The benefit you're entitled to will hinge on factors like the number of years you worked and the amount of money you earned.

There are rumors swirling about that Social Security is headed for bankruptcy, and so it pays to claim benefits as soon as you can. But that's not true. Though the program is facing financial problems right now, the worst-case scenario involves benefit cuts only.

ALSO READ: Is Social Security Doomed to Benefit Cuts?

The age you start collecting benefits at will dictate how much money Social Security pays you on a monthly basis. It's important to weigh the pros and cons of filing at different ages.

Although 59 1/2 is when you can start taking IRA or 401(k) withdrawals penalty free, you can't claim Social Security that soon. Rather, the earliest age to sign up for Social Security is 62.

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Medicare eligibility begins at age 65, but that's not when you're entitled to your full monthly benefit. To get your complete benefit, you'll have to wait to reach full retirement age, which is either 66, 67, or somewhere in between, depending on when you were born.

ALSO READ: Is Social Security's Full Retirement Age the Same for Everyone?

For each year you hold off on claiming Social Security past full retirement age, your benefits get an 8% boost. But beyond age 70, your benefits won't grow, so while you don't have to claim Social Security at 70, there's no sense in delaying further.

Claiming Social Security before full retirement age will result in a reduced benefit. You might assume that your full benefit will be restored at full retirement age, but it won't.

The monthly benefit you lock in by claiming Social Security early could be the benefit you're stuck with -- but not necessarily. You're allowed one Social Security do-over in your lifetime, so if you withdraw your benefit application within a year of filing and return all of the money you received, you'll be allowed to claim Social Security again at a later age.

ALSO READ: 3 Social Security Mistakes You Can Thankfully Undo

Seniors who are already on Social Security by the time they apply for Medicare have their Medicare premiums deducted from their benefits. But if you're not ready to claim Social Security by the time you enroll in Medicare, don't. You can simply pay for your Medicare premiums directly.

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Although Social Security benefits are subject to annual raises, they don't always kick in. Annual cost-of-living adjustments are pegged to inflation. If the cost of living doesn't rise, your benefits could stay the same.

Many seniors are shocked to learn that Social Security benefits can be subject to taxes. Whether you'll pay some will depend on what your total income looks like, but that's something you ought to prepare for.

Social Security benefits are based on lifetime earnings. But even if you never worked or paid into the system, you may be entitled to spousal benefits if you are or were married to someone who's eligible for Social Security.

ALSO READ: Claiming Social Security Spousal Benefits? These 3 Rules May Surprise You

Social Security spousal benefits are worth up to 50% of what your spouse collects. If you worked and are entitled to your own monthly benefit, you can still claim a spousal benefit if that results in higher monthly payments. You just can't collect your benefit plus a spousal benefit at the same time.

Delaying Social Security will mean snagging a higher monthly benefit. But if you're in poor health and don't expect to live a long life, then you may actually be better off filing sooner -- even as early as age 62. Doing so could mean getting more lifetime income despite receiving less money on a monthly basis.

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There's a lot of bad information circulating about Social Security, but buying into these myths could wreck your retirement planning and lead to some poor decision-making on your part. It's worth spending time to read up on Social Security so you can learn the rules and see how to maximize your benefits for retirement.

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