Social Security: Myths & facts about retirement benefits |

Social Security: Myths & facts about retirement benefits

Social Security is a vital program that touches the lives of almost everyone in the country. In part because of its size and in part because of its national impact, there are many myths and misunderstandings about the program.

Myth: My Social Security benefits will be based on my last three years of earnings.

Fact: Social Security retirement benefits are based on a lifetime of earnings. To figure your benefit, we will add up your highest 35 years of earnings after adjusting each year for inflation. Then we will divide by 420 (the number of months in 35 years) to come up with your average inflation-adjusted monthly wage. Then we apply a formula that replaces a percentage of that monthly wage with a Social Security benefit. Assuming you earn an average income, your retirement benefit would represent about 40 percent of your pre-retirement earnings.

Myth: I can take my reduced retirement benefits at age 62 and later switch to full retirement benefits at my full retirement age.

Fact: If you take an early retirement benefit, you generally will live with a permanent reduction. Your benefit does not increase when you reach your “full retirement age.” (A handy chart on our Web site at can tell you what your full retirement age is.) You must decide if you’re financially able to live with the reduced benefit for the rest of your life or if you’d be better off waiting until your full retirement age to get a higher monthly rate. A Social Security representative can go over the numbers with you so you can make an informed decision.

Myth: There is a limit to how much a married couple can receive.

Fact: There is no “marriage penalty” with Social Security. As a general rule, nothing prevents each member of a married couple from receiving his or her own Social Security benefit. For example, if a husband has worked and earned a $1,000 monthly Social Security check, and if his wife has worked and earned a $1,200 Social Security check, they will each get their full benefit for a total of $2,200 per month in Social Security benefits.

Myth: If I take my own Social Security benefit, I am always locked into it. If my husband later dies, I cannot switch to a widow’s benefit on his record.

Fact: A woman who becomes a widow can switch to benefits on her husband’s record if it is to her advantage to do so. (A widower also can make the switch if it pays him more money.)

kathy petersen is a public affairs specialist for social security, denver region. you can write her c/o social security administration, 605 main, suite 201, rapid city, sd, 57701 or via e-mail at coming up next week: social security’s popular monthly q&a installment.


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