Five Social Security Myths Busted

Pamela Kweller RSSA Staff


The Social Security program has been around for 85 years! Over the course of 85 years, there have been many changes to the program and currently, there are over 2,700 rules governing the program.

Social Security and its rules are complex and tricky to navigate so it isn’t surprising to learn that there are many misconceptions and myths regarding the program. We are here to bust those myths for you and let you know the truths.

Myth #1: Age 70 is the best age to collect Social Security.

This is false. There is no “best” age to collect Social Security benefits.

While delaying until age 70 to collect Social Security will maximize your individual monthly benefit as much as possible, it may not necessarily be the best age for you to collect.

Registered Social Security Analysts (RSSAs) are often asked the question, “What is the best age to collect Social Security?” and the answer is, “it depends.” The optimal time for you to collect benefits may be different than the optimal time for your spouse, your friend, or your sister.

Finding the best time to file for benefits is dependent on your personal circumstances including, but not limited to life expectancy, marital status, work status, and other sources of income. RSSAs take all of these factors (plus more) into consideration when helping you find your optimal age to collect benefits.

Myth #2: You can’t work while collecting Social Security.

This is false. You can work and earn income while collecting Social Security, but depending on what age you collect benefits – your benefits may be impacted.

If you are working and younger than your FRA, you are subject to the Retirement Earnings Test. This test determines if your earned income exceeds a certain threshold and how benefits, if any, will be withheld. It is important to note that when you do reach your FRA, benefits will be increased permanently to account for those missed benefits.

Myth #3: Social Security income can’t be taxed.

This was once true. Social Security income was not considered taxable income until 1983 when the Bipartisan Agreement was made. That legislation resulted in several changes to the Social Security program and one of those changes was that a portion of Social Security benefits could be subject to federal taxation.

Not all Social Security recipients will be taxed on their Social Security income. If your “combined income” or “provisional income” exceeds a specific threshold, a portion (up to 85%) of your Social Security income will be taxed. These thresholds vary depending if you are a single filer or joint filer.

There are also 13 states that currently tax Social Security income (in addition to the potential federal tax). Like federal taxation, not all beneficiaries who lives in these states will be subject to this taxation. These states have their own rules.

Myth #4: You can’t collect benefits from an ex-spouse.

This is false.

If you are divorced, you still may be eligible to receive benefits based on your ex-spouse’s record (and your ex-spouse may be eligible to receive benefits based on your record too). You may be eligible to collect ex-spousal benefits if you were married for more than 10 years, you are currently single, and you are at least age 62.

If you have been divorced for more than 2 years, you are considered “independently entitled” and therefore your ex-spouse does not need to be collecting retirement benefits in order for you to receive ex-spousal benefits based on his/her record. If you have been divorced for less than 2 years, you must wait until your ex-spouse is collecting their retirement benefits in order for you to collect a spousal benefit based on his/her record.

Myth #5: Social Security will soon be gone.

This is highly unlikely.

Social Security is a pay-as-you-go program. The payroll taxes (FICA & SECA) being paid by workers today are used to pay for the benefits of retirees today. Additionally, the Social Security Trust Funds are a reserve of money to fund full benefits.

However, back in April of 2020, the Social Security Board of Trustees released its annual report, sharing its findings regarding the long-term financial status of the Social Security Trust Funds. The report found that the funds are expected to be depleted by 2035.

The good news is there are solutions to fix this. There have already been many proposals to protect the program’s solvency, but action needs to be taken. Congress needs to take action and make changes to ensure a strong future for the Social Security program.

Social Security has remained strong for 85 years and it is strongly believed that it is not going anywhere.