5 Social Security myths debunked

Focus on the facts before you claim this valuable retirement income benefit.

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Key takeaways

  • Some people believe you have to start claiming Social Security benefits at age 62. That's a myth: 62 is the earliest age you can claim your benefit, but it’s not the only age to do so.
  • Waiting to claim Social Security after age 62 comes with a bonus: roughly 8% additional monthly income per year for each year you delay claiming (up to age 70).
  • If you're divorced and meet certain conditions, you're entitled either to your own Social Security benefit or to 50% of your ex’s Social Security benefit, whichever is higher.

Understanding how Social Security benefits work can be a challenge: There are a lot of rules, the formulas can seem complex, and making decisions with incomplete or incorrect information could end up costing you. That's why it's important to work with financial professionals to develop a Social Security claiming strategy for your overall retirement income plan.

Before you make decisions about claiming this valuable benefit, let's clear up 5 of the most common myths about Social Security that could undermine your ability to generate the income you’ll need in retirement to live the life you want.

Myth #1: You must claim your Social Security benefit at age 62

Some people think you have to start claiming your Social Security benefits at age 62. That's a myth: 62 is the earliest age you can claim your benefit, but it's not the only age to do so.

Your base benefit is calculated according to your "full retirement age," or FRA, and your FRA is determined by your date of birth. The Social Security Administration (SSA) calculates your base Social Security benefit based on your average indexed monthly earnings during the 35 years in which you earned the most (only the years that you paid Social Security taxes).

Tip: You'll find your FRA at Social Security's website, SSA.gov, or on a paper statement mailed to you by the SSA. If you were born between 1943 and 1954, your FRA is 66. People born later have an FRA of 66 (plus some months) or an FRA of age 67.

If you claim Social Security benefits any time before your FRA, you lock in a permanent reduction in monthly income. Claiming at 62 translates to a reduced monthly income of 25% to 30%, relative to your FRA monthly benefit. That means you may receive a lot less monthly retirement income, every year, for potentially several decades. You might think you're not going to live a long life, but many people do: For people age 65 today, 25% of men will live until 93; 25% of women will live to 95.1 A key consideration for when you claim Social Security benefits is maximizing your income for a retirement that could last longer than 30 years.

Wait until age 70 and lock in a "bonus":

  • Waiting to claim Social Security after age 62 comes with a bonus: roughly 8% additional monthly income per year for each year you delay claiming (up to age 70).
  • If your FRA is 66, your monthly income would increase 32% by waiting.
  • If your FRA is 66 years and 6 months (if you turned 62 in 2019), your monthly income would increase 28% by waiting.
  • If your FRA is 67, your monthly income would increase 24% by waiting.

Read Viewpoints on Fidelity.com: Longevity and retirement

Myth #2: You'll never get back all the money you put into the program

Although 70% of the respondents from our survey2 thought they might not get back all the money they put in, many will. Everyone’s situation is different, but if you live a long time, you may collect more than you contributed to the system.

Due to the complexity of claiming strategies and number of variables involved, the SSA no longer offers a break-even calculator on its website. Social Security is designed to provide a safety net of income for the retired, the disabled, and survivors of deceased insured workers. The contributions you and your employers make during your working years provide:

  1. Current retirees and other Social Security recipients with payments
  2. A guaranteed lifetime income benefit when you reach retirement

While the government does not have a specific account set aside just for you with your FICA contributions (the taxes for Social Security and Medicare paid by you and your employer), one of the most powerful features of Social Security is that it provides an inflation-protected guaranteed income stream in retirement, ensuring against the risk you'll outlive your savings. Even if you live to 100 or more, you'll continue to receive income every month. And, if you predecease your spouse, your spouse also receives survivor benefits until their death.

Myth #3: My ex-spouse's actions could negatively impact my Social Security benefit

If you have an ex-spouse, you may be entitled to spousal benefits. If you were married for 10 consecutive years and have not remarried, and you've reached your FRA, you're entitled either to your own benefit or to 50% of your ex's Social Security benefit, whichever is higher.

If you wish to claim on your ex-spouse's benefit, make an appointment with your local SSA office and bring documents that prove the marriage and divorce. They will calculate your benefit options, and when you submit your claim, you’ll receive the higher benefit.

Tip: There's no need to discuss this with your ex-spouse, and your claim does not reduce or affect your ex's benefit in any way, and vice versa. It's your benefit, even if you've been divorced for many years. And, it may be larger than your own individual benefit.

Read Viewpoints on Fidelity.com: Unraveling Social Security rules for ex-spouses

Myth #4: Your benefits are based only on wages you've earned before age 65

How your Social Security benefit is calculated can seem mysterious. However, it’s important to know a few essential facts to aid your claiming strategy. You can use the tools on SSA.gov to do the calculations.

  • Your benefit is calculated based on your highest 35 years of earnings; they don't have to be consecutive years or before age 65.
  • If you work past age 65, those earning years will be included, so long as they are high enough to be part of your highest 35 years.
  • Even working part-time after turning 65 may be part of your highest 35 years of earnings.
  • To be eligible for Social Security, you must have a minimum of 10 years of covered employment (that is, employment periods during which Social Security contributions were made), which equates to 40 credits in the Social Security system.
  • If you don’t have 35 years with earnings, zeros will be included in the calculation.

Read Viewpoints on Fidelity.com: Social Security tips for working retirees

Myth #5: You can claim early, then get a "bump up" once you reach full retirement age

Many believe there is a "bump up" or "added income" once they reach their FRA. They've heard they can claim early at 62, then when they reach 66 or older, their checks will increase to the amount that corresponds to their FRA benefit. That's a big misperception.

There's no bumping up of income once you've claimed your Social Security retirement benefit. However, anyone receiving a benefit can voluntarily "suspend" that benefit after they reach FRA and resume it as late as age 70. If they do, the annual benefit will increase by 8% per year of delay up until age 70. After that, you get an annual cost of living adjustment, but no increase in your base benefit, which will start automatically the month you reach age 70 unless you specify otherwise.

In general, you can cancel your Social Security claim if you do so within the first 12 months of receiving benefits.2 You must repay the full amount you've received, and the full amount a current spouse or family member received based on your benefit. Then, you're eligible to claim again at a later date and will receive a larger monthly payment. Each individual can only cancel a claim once in their lifetime.

There is, however, one case where you could get a "top up" benefit at FRA, but you still need to wait until your FRA to claim your Social Security benefit. In this hypothetical example, Sally earned less during her career than her husband Brad. Her FRA benefit is $700 per month; his is $2,000. As a spouse, she's entitled to 50% of Brad's benefit if she claims at her FRA. She would receive a "top up" of $300 to bring her benefit up to the $1,000 (half of Brad's benefit) to which she is entitled. Social Security will calculate her options and pay out the higher benefit to which she's entitled.

Checklist for your Social Security claiming strategy

  • Know your numbers. Find out your FRA, earnings history, and estimated benefits.
  • Stay current. Sign up for your most current statements on SSA.gov.
  • Do the math. Use calculators on SSA.gov to check out your monthly benefit options.
  • Get the facts. Don't succumb to myths; use primary resources such as SSA.gov.

Start planning early

Claiming Social Security is an important part of your retirement income plan, but it takes some time to understand the options—and the implications to your savings. Social Security can form the bedrock of your retirement income plan. That's because your benefits are inflation-protected and will last for the rest of your life. Consider working with your Fidelity financial advisor to explore options on how and when to claim your benefits.

Next steps to consider

Create your plan for retirement income.

Call or visit to set up an appointment.

Explore options on when and how to take Social Security.

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