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Myths and Facts about Social Security

The Truth Regarding Social Security

Myth #1

Social Security will provide most of the income you need in retirement. The truth is that Social Security will provide a smaller amount of retirement income than you expect. Social Security is an important faucet when it comes to retirement income, as more than 90% of Americans age 65 and older receive benefits. Social security usually isn't enough for people to live by which is why it is important to have other retirement income, such as pensions, IRA's, 401k's or by investing in the market. When combined with your future Social Security benefits, your retirement savings and pension benefits can help ensure that you'll have enough income to see you through retirement.

Myth #2

Social Security is only a retirement program. The truth is that Social Security also offers disability and survivor's benefits. Many don't realize that Social Security offers protection against long term disability because all the focus is on retirement benefits from Social Security. If you were to die, certain family members may be eligible for monthly survivor benefits.

Myth #3

If you earn money after you retire, you'll lose your Social Security benefit. The truth is, money earned after you retire only affects Social Security benefits if you are under full retirement age. Once you are at full retirement age, you can earn as much as you want without an effect on your social security benefits. But, if you are under full retirement age, the amount you earn is limited to just $17,640 as of 2019. 

Myth #4

Social Security benefits are not taxable. The truth is that you may have to pay taxes on your Social Security benefits. If your Social Security income was the only income received during the year, then your benefit generally isn't taxed. If you earn income during the year, you might have to pay federal income tax on some of your benefit. Depending on your filing status and the total amount of income you have, your social security benefit could be taxed up to 85%.

If you want more information on what to expect during your retirement, then reach out to Peter O'Brien today.