Editor’s Note: Almost nothing is more confusing for people approaching retirement than Social Security. Despite having a great website (although it’s easy to get lost in the verbiage), and helpful employees when you call, the process is muddled with myths and misconceptions.
Here’s what I told someone who was starting the process: It seems messy and confusing, but somehow it works out in the end.
If that’s not enough assurance for you, then I recommend a recent newsletter story by Kiplinger’s that tackles what they call the “Five Social Security Myths That Can Cost You.”
You can read through their calculations and explanations for yourself, but to summarize the author says these are the five myths to beware of:
- There’s No Tax on Social Security.
Wrong. Up to 85 percent of your Social Security can be taxed, depending on your income. - Social Security is ending.
Not exactly. Social Security is facing insolvency, which many people wrongly think means it will eventually stop paying benefits. To avoid losing out, some recipients have begun to claim Social Security earlier than previously planned, so they get a reduced payout. - You can’t calculate your Social Security benefits.
Yes you can, and they tell you how. - You can’t increase your Social Security payout.
Wrong, but you’ll have to delay taking it or work longer. - You can always collect your ex-spouse’s benefits.
That depends on meeting several thresholds.
You can find the full story here.
