For most United States citizens, Social Security offers one of the highest anticipated retirement incomes of most places. Yet there are some myths surrounding Social Security payments that are important. These misconceptions cause people to misunderstand it and, when it comes time to receive their retirement benefits, realize the error.
Below we are going to describe some of these myths that lead to errors among citizens and that it is important to disprove. The mistake can be very costly in most cases. Discovering the lie is very important.
Retirees receive the same Social Security benefit
Forty percent of people believe that all retirees receive the same amount of money from Social Security. This is not true. Benefit payments are tied to earnings and the amount of money you contributed during your working life.
Social Security uses average monthly earnings over the years to calculate the amount of benefits each person will receive in retirement.
Guaranteed Annual COLA
The annual cost-of-living adjustment, known as a COLA, uses a subset of the Consumer Price Index. This is known as CPI-W and increases Social Security benefits to compensate for inflation.
The Social Security Act states that benefits only increase if the average CPI-W in the third quarter of the year is higher than in the previous year. This means that not every year you will see that guaranteed increase.
After receiving Social Security, it is no longer possible to return to work
Working after receiving Social Security is possible, but with conditions. During 2022, people under retirement age can generate $19,560 per year, although they will see a reduction in their Social Security benefits.
The income limit increases with age. In the month you reach retirement age, there is no limit. You will still be able to receive full benefits.
If the worker regrets receiving Social Security benefits before retirement age, he or she can change his or her decision if he or she has been receiving Social Security benefits for less than 12 months.
