Offbeat 3 Social Security Misunderstandings That Could Cost You

15:57  08 august  2018
15:57  08 august  2018 Source:   fool.com

What Will Social Security Look Like in 50 Years?

  What Will Social Security Look Like in 50 Years? Can you, your children, or your grandchildren count on America's most important social program?As we look into the past and examine the present, it's pretty easy to forecast how the program will perform, as well as how much seniors can expect to receive, on average.

2. You can live off Social Security alone. It's no secret that Americans are glaringly behind on retirement savings, with nearly half of U.S. households having no nest egg to Compare Brokers. Current. 3 Social Security Misunderstandings That Could Cost You @themotleyfool #stocks.

Social Security can spell the difference between paying your bills in retirement or failing to keep up. But that doesn't mean you can live off those benefits without savings of your own. Compare Brokers. Current. 3 Social Security Misunderstandings That Could Cost You @themotleyfool #stocks.

Older man reading a newspaper © GETTY IMAGES Older man reading a newspaper Millions of seniors today rely on Social Security to help fund their golden years. But there's a lot of confusion about the program and how it works, and the longer you remain in the dark, the more money you stand to lose out on. Here are three major misconceptions everyone needs to get straight.

1. You have to sign up for Social Security and Medicare at the same time

Eligibility for Medicare begins at age 65, and your initial window to enroll begins three months before the month of your 65th birthday and ends three months after the month in which you turn 65. It's a good idea to sign up during that seven-month period, as doing so can help you avoid late enrollment penalties on your Medicare Part B premiums. But that doesn't mean you need to enroll in Social Security at the same time.

3 ways to boost your Social Security benefits in your 60s

  3 ways to boost your Social Security benefits in your 60s It's not too late to increase your take-home from America's most important social program.As for future retirees, national pollster Gallup found a strong expected reliance in an April 2018 survey. When polling nonretirees, Gallup observed that 30% expect Social Security to be a "major source" of income during retirement, with another 54% forecasting it to be a "minor source" of income. Overall, this combined 84% that will need Social Security in some capacity when they retire ties a high-water mark for nonretirees over the past 15 years.

Remember, Social Security can never truly go broke, and the reason is that it's funded by payroll taxes. Therefore, as long as we have a workforce, the program can continue. That said, Social Security is facing a serious shortfall

3. You can live off Social Security alone. The National Academy of Social Insurance reports that Social Security is the only source of income for roughly 25% of Americans 65 Compare Brokers. Current. 3 Social Security Misunderstandings That Could Cost You @themotleyfool #stocks.

In fact, it generally pays not to sign up for Social Security and Medicare simultaneously, because if you file for the former at or around age 65, you'll reduce your benefits automatically. You're only entitled to collect your Social Security benefits in full upon reaching full retirement age (FRA), which is 66, 67, or 66 and a certain number of months, depending on your year of birth. So if you were born in 1960 and are therefore looking at an FRA of 67, filing at 65 would cut your benefits by over 13%.

Another thing you should realize is that if you file for Social Security early enough, you won't get the option to enroll in Medicare simultaneously. You're allowed to claim Social Security benefits as early as age 62, but as we just learned, Medicare coverage doesn't kick in for another three years.

The 1 Thing You Have to Know About Social Security's COLA

  The 1 Thing You Have to Know About Social Security's COLA This explains why seniors are struggling to keep up with inflation.Two separate but similar polls from Gallup in April demonstrate this reliance. When questioning existing retirees who are receiving a benefit, 57% noted that the program represents a "major" income source, whereas 33% opined that it was a "minor" source. This means 90% of current retirees need Social Security to make ends meet, whereas a mere 10% aren't leaning on it as a source of income.

Remember, Social Security can never truly go broke, and the reason is that it's funded by payroll taxes. Therefore, as long as we have a workforce, the program can continue. That said, Social Security is facing a serious shortfall

Story From Motley Fool: 5 Social Security misunderstandings that could cost you . The Social Security Trust Fund is expected to run out in 2034, it's possible future retirees will receive less than the retirees of today.

2. If you end up filing for benefits too early, you can undo your application anytime

The problem with filing for Social Security ahead of FRA is that you'll risk limiting yourself to a lower monthly benefit for life. The only way to avoid that fate once you file early is to undo your Social Security application and pay back however much money you collected in benefits. But don't make the mistake of thinking you can withdraw your benefits claim anytime. You only get one year from the time of filing for benefits to undo that mistake. If you wait any longer, you'll be stuck with that reduction in benefits throughout retirement.

3. It pays to hold off on benefits indefinitely if you don't need the income

Though filing for Social Security ahead of FRA will result in a reduction in benefits, delaying Social Security past FRA will have the opposite effect: You'll get an 8% boost in those payments for each year you hold off. This means that if you reach FRA and don't need the money right away, it pays to wait on claiming benefits and snag that increase, which will you'll be entitled to for the rest of your life.

3 awful reasons to take Social Security benefits at 62

  3 awful reasons to take Social Security benefits at 62 Thinking of filing for benefits as early as possible? Here's why you shouldn't.For today's workers, FRA is either 66, 67, or 66 and a certain number of months -- it all depends on your year of birth. Either way, filing at 62 means taking benefits early and reducing them in the process.

Misunderstandings about Social Security can cost you real money — here are five misconceptions about these vital benefits.

Misunderstandings about Social Security can cost you real money. Here are five misconceptions that could cost many people vital Social Security benefits.

But don't make the mistake of thinking you should postpone your benefits indefinitely. The delayed retirement credits you'll accrue by waiting past FRA stop accumulating once you turn 70, so at that point, there's no incentive to wait. In fact, Social Security will only pay up to six months of retroactive benefits, so if you file well after your 70th birthday, you could end up losing money permanently.

The more you know about Social Security, the greater your chances of making the most of your benefits when you need them. So take the time to read up on the program, especially as retirement draws near. This way, you won't risk falling victim to misinformation like so many seniors ultimately do.

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What you probably don't know about Social Security .
And what Franklin Delano Roosevelt might think if he saw Social Security today.Social Security is a program that benefits the elderly, as well as disabled individuals, their families, or the families of the deceased. The program has been the source of political and economic tension in the country in recent years, as people count down the days until they can collect Social Security, while also nervously counting the days until the trust funds that hold Social Security’s assets are depleted.

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