Learn the truth about common retirement myths with a focus on 5 damaging Social Security myths that could negatively impact your retirement. Understanding Social Security benefits is crucial for financial security in retirement. Personal finance experts emphasize the importance of saving and investing for retirement to ensure your financial comfort in later years. To maximize your benefits and secure your retirement, it’s essential to debunk these common Social Security myths. One of the myths is that Social Security benefits are not taxed, but in reality, taxes may apply based on your “combined income.” Suze Orman warns that many Social Security beneficiaries end up paying taxes on their benefits. Consult a financial advisor to optimize your Social Security benefits and manage your tax liability effectively.
Planning for your Social Security benefit well in advance is crucial, as the amount you receive can vary based on multiple factors. These include your income, changes in government regulations, and the overall status of the program’s funds when you begin collecting benefits. For example, as of January 2025, the average monthly benefit for retirees was $1,978.77.
Contrary to popular belief, your Social Security benefit is not set in stone. There are steps you can take to potentially increase your eligibility for a higher benefit amount:
1. Retire later: You can choose to start receiving benefits between the ages of 62 and 70. The longer you wait, the higher your monthly benefit will be.
2. Increase your pre-retirement income: Your benefit is calculated based on your highest-earning 35 years. Boosting your income before retiring can lead to a higher Social Security benefit.
3. Review your records: Check for any inaccuracies in your income records with the Social Security Administration (SSA) and request corrections if needed.
4. Explore family benefits: You may qualify for additional benefits based on a family member’s work history, including benefits from a former spouse.
It’s important to understand that Social Security benefits are designed to supplement your retirement income, not entirely replace your paycheck. Therefore, it’s advisable to start planning early, save, and invest wisely to maintain your desired lifestyle in retirement.
One investment option to consider is a gold IRA, which offers tax advantages and stability compared to traditional stock market investments. Gold prices have shown resilience, even during times of market volatility, making it an attractive choice for diversifying your retirement portfolio. Companies often provide free rollover services for converting existing IRAs into gold IRAs, offering added benefits such as free precious metals upon qualifying purchases.
To optimize your retirement savings, consider using tools like the Acorns app, which rounds up your purchases to the nearest dollar and invests the spare change in a diversified portfolio. Acorns also offers tiered memberships, including a gold tier for customizing your investment portfolio with individual stocks and a retirement account with a 3% IRA match.
By taking proactive steps to maximize your Social Security benefits and diversify your retirement savings, you can secure a more financially stable future.
Maximize your benefits by collecting your deceased spouse’s benefits alongside your own. If you’re eligible for both a retirement benefit and a survivor’s benefit, you’ll receive the larger of the two amounts.
The surviving spouse can receive 100% of the deceased’s benefit if they are at full retirement age or older, and between 71.5% and 99% if aged between 60 and full retirement age.
Consider purchasing life insurance to offset any income losses from your spouse’s passing. Ethos offers term life insurance with up to $2 million in coverage for 10 to 30 years, providing financial security for your family.
Get a free quote by answering a few questions online and choose a policy that suits your needs.
