Social Security Myths
Everyone has an idea about Social Security—that we will get a paycheck at some point when we retire, and it lasts for the rest of our lives.
But much of the system is shrouded in mystery, and as always, the more you know about a subject, the more you can take advantage of its benefits.
Centers Health Care has details on five things about Social Security that you may not have known to give you the best possible experience.
- Social Security Money Can’t Be Raided
Some believe that the government can use Social Security funds to pay for other things when the budget is at a deficit. While Social Security surplus can be borrowed against, annual interest is paid and the loans must be repaid. No one can legally take cash from the program.
- You Can Collect and Keep Working
People often think that you can’t collect Social Security until you retire, but if you reach full retirement age (FRA) and continue to work, you can collect at the same time. The only time that your benefits would be less is if you opt to get benefits when you’re first eligible instead of waiting until full retirement age.
- Benefits Are Taxable
Don’t be in for a shock at tax season—up to 85% of benefits are subject to federal income tax, and state income tax applies in a dozen states as well. Factors like your total income determine how much of the benefits are taxable, so make sure you either do your taxes properly or have a professional take a look.
- Spousal Benefits Could Be More Lucrative
Depending on a number of factors, a spousal benefit could be more lucrative for you or your spouse instead of both of you claiming Social Security separately. This is something that a Social Security agent can help you determine.
- You Can Change Your Status Prior to Full Retirement Age
If you decide to take payments at age 62 and then change your mind, you can fill out a brief form to suspend your payments. It works the other way too—you can opt to take payments after originally deciding to delay.
