Let’s take some of the confusion out of the equation when it comes to Social Security. Putting a plan in place that works for you is always the goal, so debunking these myths about Social Security will help you along the way.
Think you’ll get the help you need from the Social Security administration when it comes to figuring out when to withdrawal from Social Security? This is an area where you need to work with a financial advisor. The Social Security administration office itself doesn’t help you make the decisions because they don’t have the proper knowledge about your situation. They are there mostly to turn it on.
If you were a stay-at-home-mom, do you assume that Social Security isn’t for you? This is a myth! At a minimum, you’ll be able to get half of what your spouse’s Social Security is. You won’t be able to turn it on until they do and you’ve reached full retirement age. This doesn’t hurt your spouse’s benefit, it’s in addition to theirs. The same goes if you’re divorced when it comes to claiming your ex-spouse’s benefits.
Think Social Security is a tax-free benefit? Sorry, this is a myth, too. You’ll still be paying taxes on your Social Security. When you’re creating your income plan, where your sources of income are coming from can determine how much of your Social Security is actually taxed. This may mean you’ll choose to delay Social Security in order to do some Roth conversions.
Do you assume you won’t have any Social Security left when you retire? Maybe Social Security will be changed in some form or fashion in the future. It may be less or taxed more, but the benefit will likely remain in some way. A lot of people rely on that as their only source of income. Just prepare for it to possibly change.
Should you claim Social Security as early as possible? This might not be the best decision for your plan. You have to look at Social Security as an asset in order to maximize that income. The whole idea of having a retirement plan is determining what the best things to do are to help you set up your best retirement. Having an advisor will mean you’ll be coached on what to do to make it happen.
Listen to the entire episode or skip ahead using the timestamps below.
0:39 – Troy is mid-move!
1:46 – Let’s bust some Social Security myths.
1:57 – The Social Security Administration will help you make the best decision.
3:46 – Stay-at-home moms don’t get Social Security.
6:10 – You won’t pay taxes on your Social Security.
8:12 – There won’t be any Social Security left when you retire.
10:19 – Claim Social Security as soon as you’re eligible.