Misunderstood Facts about Social Security

Throughout 2014, the government will pay almost $863 billion of Social Security benefits to over 59 million Americans. According to the Social Security website (SSA.gov), “Among elderly beneficiaries, 52% of married couples and 74% of unmarried persons receive 50% or more of their income from Social Security.” Social Security benefits can provide a substantial amount of your retirement funds. However, many individuals struggle to grasp the basic details about this program. Some of the most commonly misconstrued facts are listed below.
First, Americans fail to understand that official retirement does not begin at age 65. Retirement ages vary slightly based on the year in which you were born. If you were born between 1934 and 1954 you can retire at age 66. If you were born after 1960, the full retirement age increases to 67.
Second, people do not realize that there is no requirement for you to be a citizen of the United States to collect SS benefits. If you have worked for 10 years and have paid taxes into the system you are usually eligible to collect benefits.
Third, individuals are surprised when they are told that working can reduce your Social Security payouts. If you have not yet reached your full retirement age, earning more than $15,720 will delay your benefits. For every $2 you earn past this limit, $1 will be deducted from your payouts. This money is not lost, but you will not receive it until after you reach your full retirement age.
Fourth, many Americans have no idea that you can receive spousal security benefits after becoming divorced. If you were married for more than 10 years and have not remarried you are allowed to collect these payments. Furthermore, by collecting spousal benefits you may be able to push back your own retirement, gaining delayed retirement credits and increasing your income.
Finally, many people underestimate just how much they should count on Social Security during their retirement. While Americans expect Social Security to be around when they retire, many expect that most of their expenses will come from their own personal savings. However, this outlook does not fit the data being reported by the government. Individuals must realize that Social Security will likely be a huge part of their retirement plan and learn to use it to its full potential.