
5 Common Myths About Social Security
When it comes to Social Security, there’s no shortage of myths floating around. And since this is such an important piece of your retirement puzzle, it’s essential to separate fact from fiction. Let’s bust five of the most common Social Security myths so you can approach your retirement with clarity and confidence.
1. Social Security Will Run Out
This is one of the biggest fears out there. While it’s true that Social Security faces challenges, it’s highly unlikely to disappear. Adjustments, such as benefit recalculations or tax changes, are often discussed to keep the program sustainable. The trust fund might face shortfalls in the future, but that doesn’t mean benefits will vanish – just that adjustments could be needed.
2. You Should Claim Benefits as Soon as You Can
Many believe they should start collecting at 62 to avoid “missing out.” But if you can wait, delaying your benefits will result in a higher monthly payout for life. For each year you wait past full retirement age, your benefit grows – up to age 70. Timing your Social Security well can make a big difference in your retirement income strategy.
3. Social Security Is Tax-Free
Unfortunately, not always. Depending on your income, up to 85% of your Social Security benefits could be taxed. This depends on your total income from pensions, investments, and other sources. A solid tax strategy is key to maximizing what you get to keep!
4. I Won’t Get Social Security If I Keep Working in Retirement
Not true! If you keep working after you start collecting benefits, you can still receive Social Security. However, if you begin taking benefits before your full retirement age, there are income limits, and earning above those limits could temporarily reduce your monthly benefit. Once you hit full retirement age, those limits go away.
5. Social Security Will Cover All My Retirement Needs
Social Security was never designed to replace your full income. It’s meant to be a safety net, not your entire plan. For most people, Social Security will cover only about 40% of pre-retirement income. This is where a personalized financial plan, including savings, investments, and spending strategies, comes into play.
At Great Waters Financial, we’re here to help you understand the role Social Security plays in your unique retirement strategy. When you have clarity on your benefits, you’re empowered to make the right decisions to Live Greatly™ in retirement. If you’re curious how Social Security fits into your overall financial plan, let’s chat – we’re ready when you are.
Live Greatly™. Feel confident. And let’s build a future where you can focus on what matters most.