Busting Social Security Myths
Think you understand the rules, complexities and exceptions of the Social Security system? You're doing better than most. Here are some common misunderstandings.
Myth or truth? Social Security puts your tax money in an account with your name on it. Retire and you can have that money back with interest.
That's a myth. The system is set up to transfer earnings from a generation of workers to a generation of retirees. You paid for your parents' retirement. Now your kids are paying for yours.
Think both couples and individuals who retire at 65 or better receive more in benefits than they paid in taxes? Good thought. A recent Urban Institute study found that in nearly all scenarios benefits received outweighed taxes taken.
Of course, this applies to Social Security AND Medicare. Without Medicare in the equation, some younger beneficiaries may not come out ahead.
Myth or truth? If you continue working after receiving benefits and go over earnings limits, Social Security will withhold some of your benefits and you will never see them again.
That's a myth. The Social Security Administration will recalculate benefits after you reach full retirement age and give you credit for the months you exceeded limits. Don't forget that limits only apply to those receiving benefits before full retirement age.
Don't think a non-working wife can be eligible for benefits? Think again. Spousal benefits are an important strategy for improving a couple's retirement income.
Don't get caught believing in myths. Learn the facts.
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