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4 Social Security Myths Debunked 

Retirement Planning
Older couple riding their bikes on a beach and talking about social security

Social Security — many people recognize this term as a line item on their paycheck, but unfortunately, few people truly understand it.

Several misconceptions still surround Social Security — even though the program has existed for over 80 years. Here is some background on the program, plus some of the most common Social Security myths and the truth behind them.

What Is Social Security?

The Social Security program began in 1935 when President Franklin Roosevelt signed the Social Security Act into law.

The program was a response to the Great Depression, when a weak economy plunged many Americans into poverty. As Roosevelt said at the time, Social Security was designed to help give average Americans some measure of financial protection as they got older and could no longer work or if they lost their job.

Social Security is funded through payroll taxes, and the program distributes monthly benefits based on your full retirement age, which varies depending on your birth year. For example, if you were born between 1943 and 1954, your full retirement age is 66.

The Social Security Administration calculates monthly benefits based on your lifetime earnings and your average monthly earnings during the 35 years you earned the most.

Common Social Security Myths

Myth #1: It's Best to Claim Early

Fact: The earliest you can claim Social Security benefits is age 62. However, if you want to collect 100 percent of your monthly benefit, you have to wait until you reach your full retirement age, which will depend on the year you were born. For instance, if you were born between 1943 and 1954, your full retirement age is 66. If you collect benefits at age 62, you'll receive 75 percent of what you're entitled to at your full retirement age. At age 65, you'll receive about 93.3 percent of your monthly benefit.

MORE How to Potentially Increase Social Security Benefits After Retirement

Myth #2: You Must Claim at Retirement

Fact: While experts often cite 65 as the retirement age for employment purposes, some people continue to work past retirement age for a variety of personal or financial reasons.

If you're one of them, this could benefit you when it comes to Social Security. Delaying your benefits will increase the monthly amount you get when you eventually claim your entitlement. For example, if you were born between 1943 and 1954, your full retirement age is 66. If you don't begin collecting Social Security until age 67, you'll receive 108 percent of the monthly benefit to which you're entitled. If you wait until age 70, that percentage jumps to 132 percent.

Myth #3: Marital Status Doesn't Matter

Fact: Marriage has several financial benefits within the Social Security system.

Spouses can get up to 50 percent of their husband's or wife's Social Security benefit. Even if you've never worked or contributed payroll taxes to the Social Security program, you may be able to collect benefits if your spouse currently collects them and you're at least 62.

If you're entitled to receive monthly Social Security benefits because you worked, you still can qualify to receive spousal benefits. If your spousal benefits are higher than what you'd get on your own, the Social Security Administration gives you a combination of benefits that totals the higher amount you'd get as a spouse. Another important point: You can collect spousal benefits even if you're divorced. You're eligible in this case if your former spouse is entitled to Social Security, if you were married for at least 10 years, if you're currently unmarried and at least 62 years old, and if the amount you would receive based on your own lifetime earnings is less than what you'd get as a spouse.

Whether you're divorced or still married, the same rules apply if you begin drawing Social Security benefits early. If you do so between age 62 and full retirement age, you won't get 100 percent of your benefit.

MORE Married Couples With Social Security Benefits

Myth #4: Social Security Has an Accurate Record of Your Earnings

Fact: Unfortunately, this isn't always true. To get a better picture of your earnings history, create an account on the Social Security website.

Once you do, you can access regular statements, review your earnings history and get estimates of your future monthly benefit. Social Security calculates monthly benefits based on your lifetime earnings and your average monthly earnings during the 35 years you earned the most, so if you notice any inaccuracies, contact the agency or your local Social Security Office to correct the information. You have up to three years, three months and 15 days after the calendar year in which you received the earnings to correct the record.

Using Social Security to Your Benefit

Misconceptions shouldn't keep you from collecting all the Social Security benefits to which you're entitled. As you approach the end of your working years, these benefits could add extra financial cushion on top of your other retirement savings. If you've spent your lifetime working — or have a spouse who has contributed to Social Security — you deserve to collect this money, and it may be important for you as you near or enter retirement.

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