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Social Security is among the most critical safety nets for older Americans and individuals with disabilities. If you are approaching retirement age, or if you are already receiving benefits after retirement or due to a disability, it is likely that you already recognize how vital Social Security benefits are to your future.
However, there are many myths surrounding Social Security benefits. Even individuals who currently receive benefits might have misperceptions about the state of the program, how it works, or what factors affect their payments. The experienced legal team at the Law Office of Carey Thompson, PC, has compiled this guide to help dispel five of the most common myths about Social Security.
Myth #1 – Social Security Is Running Out of Money
One of the most persistent myths about Social Security is that the program is on the verge of bankruptcy. While it’s true that Social Security faces long-term financial challenges, the program is not going bankrupt. According to the Social Security Administration, the combined trust funds that pay Social Security benefits will be able to pay full benefits until 2035. After that, even if no changes are made, the trust funds will still be able to pay about 80 percent of scheduled benefits.
Myth #2 – The Social Security Retirement Age is 65
Many people believe that the Social Security retirement age is 65. However, this is no longer the case. The full retirement age (when you can receive your full Social Security benefits) has gradually increased. For people born in 1960 or later, the full retirement age is 67. While you can still start receiving benefits as early as age 62, the amount you receive each month will be reduced.
Myth #3 – Social Security Benefits Are Tax-Free
Another common misconception is that Social Security benefits are not subject to income tax. The truth is that, depending on your income, up to 85 percent of your Social Security benefits may be taxable. If your combined income (which includes your adjusted gross income, nontaxable interest, and fifty percent of your Social Security benefits) is more than $25,000 for an individual or $32,000 for a married couple filing jointly, you may owe federal taxes on your benefits.
Myth #4 – Your Ex-Spouse’s Benefits Come Out of Your Own
Divorced individuals may be eligible to receive Social Security benefits based on their ex-spouse’s work record. However, some people mistakenly believe that these benefits will reduce their ex-spouse’s own benefits. This is not the case. If you qualify for benefits based on your ex-spouse’s record, it will not affect how much your ex-spouse or their current spouse may receive.
Myth #5 – You Will Lose Benefits Permanently If You Keep Working
Finally, some people believe that if they continue working while receiving Social Security benefits, they will lose those benefits permanently. This is not true. If you work while receiving benefits before your full retirement age, your benefits may be reduced temporarily. However, once you reach full retirement age, your benefit will increase to account for the benefits that were withheld due to your earnings.
Contact the Law Office of Carey Thompson, PC, Today
Although millions of Americans depend on Social Security, it can be challenging to understand how it works. An experienced Texas estate planning attorney can help you understand your Social Security rights and answer any questions you might have about your benefits. The seasoned legal team at the Law Office of Carey Thompson, PC, is ready to assist individuals in Azle, Dallas, Fort Worth, Keller, Saginaw, and throughout Tarrant County with their Social Security needs. Call us today or contact us online for a consultation to learn more about how we can help you.