It’s time for me to dust off and update a column I write every five years or so about Social Security myths. I could write a book called “The Top 100 Social Security Myths.” But I’m having too much fun taking bike rides with my wife and playing Scrabble with her on the back porch to spend time doing that. So instead, I’ll just take an hour or so out of my day to write this column that exposes the five most common program and policy Social Security myths. At some future date, I’ll put the kibosh on all the silly political myths about Social Security that are floating around on the internet.
Myth No. 1: There are secret or hidden rules to Social Security.
Almost every day I get emails from readers who tell me about suspicious mailings they get, usually from financial planning outfits inviting them to a seminar with come-ons like this: “Learn the hidden truths about Social Security” or “The Social Security secrets the government won’t tell you!”
I always want to tell the folks behind these misleading mailers that they should level with their intended audience. There are no hidden rules. There are no secrets about Social Security the government is trying to hide from you.
To be sure, there are many Social Security rules and regulations that people may not be familiar with. But they certainly aren’t secret. The Social Security Administration maintains an award-winning website that tells you anything you need to know about your eligibility for Social Security benefits. They also produce more than 100 pamphlets and fact sheets explaining the program’s rules. And the agency maintains more than 1,000 field offices around the country to help people file for benefits.
The most common “secret” hyped by financial planners involves a strategy discussed hundreds of times in this column, usually called “file and restrict,” which allows one member of a couple to file for spousal benefits on a husband’s or wife’s record while allowing his or her benefits to grow until age 70. That rule, which certainly is not a secret, and that is being eliminated anyway in a couple years, applies to a very limited number of people. The vast majority of senior citizens have very simple and straightforward Social Security eligibility issues that involve no mysteries, no secrets and no hidden rules.
Myth No. 2: Lower earnings near retirement will reduce your Social Security check.
Many potential retirees lose sleep if they have some years of lower earnings just before they retire. They think this will adversely impact the amount of their Social Security check. It will not. This myth is an offshoot of another commonly held misconception about Social Security: that retirement benefits are based on the last five or 10 years of earnings. They are not. The Social Security retirement formula uses a 35-year base of earnings, all of which have been indexed for inflation. So a few years of reduced earnings just before retirement will have minimal, if any, impact on a Social Security retirement benefit.
Myth No. 3: A wife is always due half of her husband’s check.
A wife gets a benefit rate equal to one-half of her husband’s full retirement benefit only if she waits until age 66 to claim those benefits. But most wives take their benefits at age 62. In that case, they get an amount equal to about one-third of the husband’s retirement benefit. If they start benefits between 62 and 66, the benefit rate is somewhere between one-third and one-half.
When discussing this issue, we generally are talking about women who were stay-at-home moms for most of their lives, meaning they have little or no Social Security of their own. If a woman has worked much of her life, she will get her own Social Security retirement benefit and usually won’t be due anything on her husband’s record.
Myth No. 4: If you are due two benefits, you get them both.
Anyone who is married or has ever been married is potentially due two Social Security benefits. But as a general rule, if you are due two Social Security benefits, you don’t get them both. You get only the one that pays the higher rate.
There is a twist to this rule however. It can best be explained with an example. (And to keep my math simple, I’ll just assume everyone waited until age 66 to file for Social Security.) Husband Hal is getting $2,000 in retirement benefits. Wife Wilma didn’t work very much outside the home. So she just gets a small $600 Social Security check. But as Hal’s wife, she is due $1,000 in spousal benefits. She doesn’t get a $600 retirement check AND a $1,000 spousal benefit. She gets the higher benefit, or $1,000. But there is a rule that says if Wilma is due anything on her own record, she must be paid it. So Wilma will get $600 on her record and another $400 off of Hal’s account to take her up to the $1,000 level. In other words, at least on paper, Wilma is getting benefits from two Social Security accounts. But in reality, she is just getting one check for $1,000.
Myth No. 5: You have to be married for 10 years to claim spousal benefits.
Based on my emails, I’d bet that 90 percent of my readers think that a couple must be married for 10 years in order for the lower earning spouse to claim benefits on the higher income spouse’s record.
But that’s not true. The 10-year duration-of-marriage rule applies only to a divorced spouse trying to claim benefits on an ex’s Social Security account.
If you are currently married, the law usually says the marriage must have been in effect for only nine months to claim spousal benefits.
