Social Security has a problem.
And while there are a lot of tiny rules that can cause confusion, the multitude of myths about the program causes confusion and spreads misinformation about the benefits program that many rely on in retirement.
So let’s tackle some of these Social Security myths. There are many false claims about how the program is funded and how and why that money is running out, but we are just going to focus on myths about how the program works today.
Social Security Myth No. 1: There Is Some Secret Bigger Payouts
There are so many myths floating around online and otherwise that there are some big secrets that will help you boost your monthly benefits checks by thousands of dollars.
And it’s a bunch of baloney.
Most of these secrets come down to one thing: When you decide to start your Social Security benefits.
So let’s go ahead and bust this myth.
In order to get the biggest Social Security check possible, you need to wait until you turn 70 to start the program. Waiting until after your full retirement age (which is somewhere between 66 and 67 depending on when you were born) will boost your checks by up to 32% if you wait until 70.
You can apply for Social Security as early as 62, but that will reduce your checks. Here’s a handy chart that breaks down how much of your full benefits you will receive depending on when you file.
| START COLLECTING AT: | FULL RETIREMENT AGE OF 66 | FULL RETIREMENT AGE OF 67 |
| 62 | 75% | 70% |
| 63 | 80% | 75% |
| 64 | 86.7% | 80% |
| 65 | 93.3% | 86.7% |
| 66 | 100% | 93.3% |
| 67 | 108% | 100% |
| 68 | 116% | 108% |
| 69 | 124% | 116% |
| 70 | 132% | 124% |
So waiting until 70 means a bigger check, but that doesn’t always work for everyone. If you are in poor health, it may make sense to file earlier so you can start receiving and using the money you are entitled to. By waiting until you are older, you may take in less benefits in the long run, even with a bigger check.
Social Security is going to serve a different purpose depending on your own individual situation, so it’s important to evaluate your own standing to figure out how best to use the program.
Myth No. 2: Benefits Are Based Only a Few of My Best Years of Work
The bottom line is that Social Security uses your 35 highest-earning years of employment, adjusted by inflation. If you started working at 20, that means you would rack up 35 years of employment by age 55.
That means you may have some flexibility as you approach retirement to maybe work a part-time job, or even delay Social Security a bit longer to knock off some of those lower-earning years.
The Social Security Administration has a handy tool that you can use to figure out how much some of those thinner years may affect your check overall, but because the program uses 35 years to calculate your benefits, you may be surprised to see it doesn’t have that big of an affect on your monthly checks. Check out the SSA’s retirement estimator here.
Myth No. 3: The Program Is Run by the Gov’t, so It’s Inefficient
Social Security claims are typically processed at a quick pace — anywhere from a couple days to maybe a week or two. Creators columnist Tom Margenau says it’s good practice to file around two months before you want to start claiming benefits, just to be safe.
The SSA is also fairly efficient when it comes to dealing with everyday issues from beneficiaries. Margenau ran a survey among his readers and found that the administration’s employees are incredibly well-versed in the program and are quick to fix any issues beneficiaries have. He also suggests asking for a supervisor if it seems like the employee you are working with is having trouble helping.
Debunking some myths surround Social Security can help you greatly in figuring out how to get the most out of the benefits program in retirement.
• You can find all of the latest and most important news about Social Security here on Money and Markets.
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