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Discussing Social Security Myths
In a YouTube post, BetterMoneyTV.com hosted a discussion on a handful of myths and misunderstandings widely held in the general public about Social Security. The discussion focused on four key perpetuated misstatements: (1) many think they must start benefits at 62; (2) if they do start at 62, they’ll get an increase at their full retirement age; (3) you’ll never get back all you’ve contributed to Social Security; and (4) benefits are only based on wages earned before age 65. Check out the video here…
On this last point, while it is indeed a myth, the explanation presented in the video is a bit off-base. The speaker suggests that earnings after 65 increase your benefit, even if you’re already drawing benefits. In reality, the formula for calculating a primary insurance amount (one’s base benefit) is based on the worker’s highest 35 years of inflation-adjusted earnings, and any earnings after age 65 would only increase benefits if they exceed the lowest of these inflation-adjusted earnings records. That’s possible, but unlikely in many cases, especially those who take lower-paying or part-time work after beginning their Social Security benefits.
As the speaker says, it’s complicated folks! At the AMAC Foundation Social Security Advisory Service, we deal with these types of issues nearly every day, and we take great pains to ensure that our constituents are provided accurate and credible information. If you have any questions about this free-to-the-public service program, check us out here.