5 Common Misconceptions about filing for social security.

Misconception #1: You don’t have to pay taxes on your social security benefits.
Income taxes you’ll have to pay on your Social Security benefits are known as a “stealth tax.” These taxes largely go unnoticed and unrecognized because most people aren’t aware of them. Some retirees are hit with these taxes early on in retirement while others have to foot the bill later. Sometimes called “Double Stealth Tax,” these Social Security taxes can involve (1) being taxed on up to 85% of your benefits, (2) being bumped into a higher tax bracket when combined with your income, and (3) your marginal and long-term capital gains taxes could increase.

Misconception #2: The Social Security program is going bankrupt.
A lot of Americans believe Social Security is about to dry up. According to the Government Accountability Office, the fund is projected to run out in 11 years. Other reports are saying it could happen in just 8 years due to the economic fallout from the pandemic.

Misconception #3: Delaying your benefits will result in a bigger check.
A lot of people believe that waiting to claim Social Security will result in a higher paycheck. But it’s a lot more complicated than that. There’s no one-size-fits-all strategy to figuring out your biggest payday with Social Security. Filing at the wrong time could cause you to accidentally forfeit hundreds of thousands of dollars in benefits.

Misconception #4: Your spouse must die for you to get spousal benefits.
You could be eligible for spousal benefits when your spouse is alive—even if you’re divorced. If you’re married and your spouse gets a monthly $2,000 benefit, you’re entitled to $1,000 a month, even if you never worked. You just have to sign up for Social Security when you reach full retirement age (67). If you worked and you qualify for your own benefits, you’ll receive whichever amount is higher between your benefits or 50% of your spouse’s.

Misconception #5: You can count on the SS Administration to help you with your decision.
There are 2,728 rules in the Social Security Administration’s (SSA) handbook, and hundreds of thousands of rules about those rules in its Program Operating Manual System. According to Forbes, the agency has some 40,000 undertrained, overwhelmed, and sometimes arrogant staffers who routinely tell people things that are dead wrong, half wrong, misleading, or incomplete. As a result, thousands of people are making wrongly informed decisions that are costing them huge sums.