I could write a book called “The Top 100 Social Security Myths.” And that book would be divided into two main sections: 50 political myths and 50 program myths.
The political myths deal mostly with the history and financing of Social Security. Many people, usually with an ax to grind or a chip on their shoulder, publish very biased screeds on the internet that are full of lies and half-truths about the program. They will say things like: “The government has stolen Social Security funds” (it hasn’t); “Illegal immigrants collect Social Security benefits” (they don’t); or “Social Security sends monthly checks to welfare recipients who never worked and paid into the system” (it doesn’t). And then uninformed or naive people pass these missives around from one to another, and soon they go viral and are assumed to be true by millions of Americans.
Because I wrote a couple of columns not too long ago addressing some of the most egregious of these political rumors, today and next week I will take on the other half of the Social Security rumor mill: the program myths that confuse people about how Social Security works. I simply won’t have the space to address 50 — or even 10 — myths. But over my next two columns, I’ll squeeze in as many as I can.
In today’s column, I will address myths and rumors surrounding Social Security retirement benefits. In next week’s column, I will do the same for dependent and survivor benefits.
Myth: My Social Security retirement benefit is based on my highest five years of earnings (or maybe it’s my last 10 years), so if I stop working early, or work part time for a few years before I retire, I am really messing up my Social Security check.
All Social Security retirement benefits are based on a person’s highest 35 years of inflation-adjusted earnings.
So, a few years of lower earnings, or even no earnings, just before you retire will have a minimal affect on your future Social Security benefits.
If you are thinking of retiring early, or if you are planning to work part time for a few years before you sign up for Social Security, there is a way you can find out what affect your reduced earnings might have on your eventual retirement benefits.
Go to https://www.socialsecurity.gov, and at the homepage, click on “Retirement Estimator.” This will lead you to a series of online calculators you can use to get an estimate of your future Social Security checks.
Myth: I am missing out on hundreds of thousands of dollars in Social Security benefits because I don’t know all the secrets.
There are dozens of such come-ons polluting the internet that would lead you to believe that if you just knew all the so-called secrets to the program (which they will sell you for a fee), you will come out many thousands of dollars ahead in your Social Security investment. And if you pursue these leads, here is the big “secret” you will learn: Wait until you are 70 to collect your Social Security retirement benefits. The theory is, assuming you live to a ripe old age, you will come out ahead of the game by waiting to get the 32% delayed retirement bonus that is payable at 70.
I have discussed this issue countless times in my column. For some people, it does make sense to wait until you are 70. For others, starting your Social Security at 66 is the best choice. And for some, taking benefits at 62 is a wise move. When to start your Social Security depends on so many factors: your health, your job, your marital status and your tax situation, to name just a few.
You just need to gather all the facts and make a decision.
There is another alleged “secret” peddled on the internet that is tied into the argument to wait until age 70. And that is the loophole in the law that allows someone who is 66 years old to claim benefits on a spouse’s Social Security record and, at 70, switch to 132% of their own retirement benefit. Over the past two years, I don’t think there is any Social Security topic I’ve discussed more than this “file-and-restrict” procedure. So it certainly is no secret to my readers. BUT, that loophole closes in January 2020. Or, to be more precise, only people who turn 66 before January 2020 can make use of this oftentimes lucrative loophole.
Myth: We all know the government can’t do anything right. So I better sign up for Social Security at least six months ahead of time.
You can blame the government for ineptitude in handling some things, but Social Security claims development isn’t one of them. The Social Security Administration processes most retirement claims in a matter of a few days — maybe a week or two. But still, just to be on the safe side, you should file for Social Security about two months before you want your benefits to begin.
Myth: Social Security employees can’t be trusted to process my claim correctly.
Regular readers of my column know that I certainly have taken my former colleagues at SSA to task for misinformation they have given out to their customers. But folks should know that those instances are the exception to the rule.
Some of you may recall a survey of my readers I took not too long ago, following a spate of negative comments I received about SSA service. Hundreds of you responded to that survey. And I was pleased to learn that the overwhelming majority of people reading my column (something like 90%) told me that their dealings with SSA were professional and courteous, and they were satisfied with the service they received and the information they were given.
What I gathered from the survey was this: SSA employees handle routine inquiries and claims with a remarkable degree of knowledge and efficiency. And the good news is that almost all of us have rather routine interactions with Social Security. Where SSA employees sometime slip up is in nonroutine situations, such as the aforementioned file-and-restrict procedure. If you are dealing with SSA and have an unusual situation, and the representative assigned to you seems confused, ask to speak to a supervisor.
