Social Security benefits form a cornerstone of retirement income for millions of Americans. Yet, confusion about when and how to claim these benefits often leads to costly misconceptions. Even though information is abundant, myths about Social Security still circulate, making it hard for retirees to separate fact from fiction.

This blog tackles several common myths with clarity. It relies only on publicly available Social Security rules and avoids claiming there’s a single right answer. It offers a balanced, educational view of your options without suggesting an optimal strategy, since that depends on personal circumstances.

Myth 1: You Should Always Claim Benefits at Age 62

The Reality: Claiming benefits at 62—the earliest possible age—is an option, but it results in a permanent reduction in monthly benefits. For people born in 1960 or later, the full retirement age (FRA) is 67. Claiming early can reduce benefits by as much as 30%, especially for those who’ve paid Social Security taxes.

Delaying benefits past FRA can increase monthly payments through delayed retirement credits, up to age 70. However, the best time to claim depends on factors like life expectancy, current income needs, marital status, and employment.

Myth 2: Social Security Is Going Bankrupt

The Reality: The Social Security Administration’s 2024 Trustees Report projects the program’s trust fund reserves will run out by the mid-2030s. Yet, this doesn’t mean Social Security will vanish.

Even if the trust fund depletes, ongoing payroll taxes should fund about 75% to 80% of scheduled benefits. Changes to the program may occur, like higher taxes or revised benefits, but a complete end to Social Security isn’t expected right now.

Myth 3: You Should Claim Benefits as Soon as You Stop Working

The Reality: Retiring doesn’t mean you must immediately claim Social Security benefits. If you have other income sources—like pensions, retirement savings, or part-time work—you may not need Social Security right away. An income annuity can also provide steady income and serve as a valuable option.

A solid retirement income strategy, which might include treasury investments, can help manage your income sources. You could choose to delay benefits to secure higher monthly payments later, helping ensure stronger income in the future.

Delaying benefits often helps people who expect longer lifespans. Yet, if you need immediate income, early claiming may still make sense despite reduced payments.

Myth 4: Social Security Is Tax-Free

The Reality: Depending on your total income, up to 85% of Social Security benefits might be taxable. The IRS uses a calculation called “provisional income,” which includes:

• Adjusted gross income
• Nontaxable interest (such as municipal bonds)
• Half of your Social Security benefits

If your provisional income crosses certain thresholds, part of your benefits becomes taxable. This matters when coordinating withdrawals from retirement accounts.

Myth 5: There’s No Advantage to Waiting Past Full Retirement Age

The Reality: For every year you delay claiming benefits beyond FRA until age 70, you earn delayed retirement credits of up to 8% per year. These increases are permanent and can create significantly higher lifetime income, especially for people with longer life expectancies.

Waiting may also help surviving spouses. The higher benefit becomes available to the survivor after the first spouse passes away.

Myth 6: If You’re Married, You Should Claim at the Same Time

The Reality: Spousal strategies often benefit from staggered claiming ages. One spouse might claim early to cover household income needs, while the other waits for a larger benefit.

Spousal benefits—up to 50% of the higher-earning spouse’s FRA benefit—can be important in retirement income planning. These rules are complex and require careful coordination.

Myth 7: You Can Just “Undo” Your Claiming Decision Later

The Reality: The Social Security Administration allows one withdrawal of a claim within 12 months of starting benefits, but you must repay all benefits received. After that window closes, your options are limited.

If you’ve reached FRA, you can suspend benefits to earn delayed retirement credits going forward. However, you won’t receive back pay for the months you suspend. That’s why these decisions deserve careful planning.

How to Evaluate Decisions Thoughtfully

There’s no universally “best” strategy for claiming Social Security. Important factors include:

• Health and life expectancy
• Marital and survivor planning
• Coordination with other retirement income
• Employment status

Tools like the Social Security Administration’s Retirement Estimator and personalized benefit statements can help model different scenarios. Even so, these tools have limitations and require context.

Conclusion: Fact-Based Planning Works Best

Optimizing Social Security isn’t about discovering a magic formula. It’s about aligning decisions with your personal goals, timeline, and financial situation. Factors like total return, cash flow, and interest rates all play a part.

Understanding the rules and debunking common myths helps retirees strengthen their retirement portfolio and income plan. It empowers you to make informed, confident choices.

At TruNorth Advisors, we help clients explore how Social Security fits into their overall retirement plan. We consider tax and financial factors to help you see the big picture.

If you’re preparing to make this important decision, schedule a consultation with TruNorth Advisors for education-focused guidance tailored to your journey.

Disclosures: This article is intended for educational purposes only and does not constitute financial or tax advice. TruNorth Advisors is not affiliated with the Social Security Administration. Please consult with the SSA or a qualified professional for personalized assistance.