subject: Social Security Benefits - Facts And Myths [print this page] If you're getting puzzled and are not sure about Social Security benefits, you just need proper guidance in this matter. There is much misinformation about a delicate subject like social security which should be cleared up fast. Due to these common misconceptions, people often fail to decide when they will qualify for social security benefits. This article tries to make everything clear.
1. Misconception: Social Security will give a major part of your income after retirement:
Truth: Social Security will give retirees lesser amount of income than their expectation.
Social Security is a recognized source of retirement income for a large part of United States population. As per the findings of Social Security Administration, nine out of every ten people in the age group of 65 or more get social security benefits. But it is not desired to depend heavily on social security programs, because some revisions will be made to the system in order to keep it solvent. The wealthier and younger is an individual, the more he or she will be affected by these changes. But social security cant be a solid source of income for people no matter whether their retirement is just around the corner or years away. This exclusive program is not designed as an alternative for pension plans, personal savings and insurance coverage. It should be rather treated as the base upon which different forms of financial security can be strongly built. Irrespective of the fate of social security, everyone should save as much as possible for retirement. You can succeed in it by investing in mutual funds, bonds, stocks, and paying to employer sponsored security plans and various tax-deferred investment vehicles like 401(k)s and IRAs. When taken into account along with your social security benefits, it will make a significant amount for your income after your retirement.
2. Misconception: Social Security is a saving plan for retirement:
Truth: Apart from retirement income, social security offers survivors and disability benefits.
Social security plans are always highlighted for their retirement income benefits. You should never forget that they offer long-term disability security. If you qualify for disability or retirement benefits, your nominees or family members get entitled to receive benefits as well. Another important source of income for your family is Social Security survivor's benefits. In case you die, a few selected members of your family, including your dependent parents, children, and spouse, may receive survivor's benefits every month that can easily compensate the income.
3. Misconception: If you earn after your retirement, Social Security benefits wont be available to you:
Truth: Money earned after your retirement will affect your Social Security benefits only if have not attained full retirement age (62-65).
Once you attain full retirement age, you are free to earn as much as possible without affecting your income retirement benefits. But any money that you earn without attaining full retirement age might just affect the income benefits you are likely to receive:
$1 in income benefits will get deducted for every $2 you make above the fixed annual limit when you are under full retirement age. The limit is $14,640 for year 2012.
In the year you attain full retirement age, $1 in income benefits will get deducted for each $3 you make more than a different annual limit, but only considering income before the month of your full retirement age.
