Here at AgingOptions we work every day with clients who are in varying stages of retirement (or “pre-retirement”). We teach seminars about retirement planning and we stay up to date about programs, policies and trends that affect aging Americans. As a result, at times it’s easy for us to assume that everyone has a good solid base knowledge about important government programs such as Social Security which are vital to the majority of retirees.

So we were a bit surprised to read this very recent article from the financial website Motley Fool that talks about the five common misconceptions about Social Security that many U.S. adults still hold. Yet as we considered these five points we came to realize that, until one comes face to face with this somewhat complex yet essential program, it’s easy to hold onto erroneous ideas. In the words of the Motley Fool article, “Social Security is a massive retirement plan, as most American senior citizens are receiving, or will eventually receive, Social Security benefits. However, there is much about the Social Security program that’s often misunderstood.”

So what are these misconceptions? Let’s take a look – and as we do, bear in mind that even if you already know the facts about Social Security, many in your circle of friends do not. You might consider referring them to this article (and encouraging them to attend an AgingOptions LifePlanning Seminar. We’ll describe more about that in a moment). Which of these five statements about Social Security is false? Spoiler alert: they all are.

• “Social Security retirement age is 65.” The article calls this “a common, but understandable misconception.”   Because many employers use 65 for their full retirement age, and because that’s also the age of eligibility for Medicare, people often assume Social Security has the same threshold age.  As the Motley Fool reminds readers, “the last people who had a full Social Security retirement age of 65 were born in 1937. Everyone who hasn’t yet reached the maximum age to claim Social Security has a full retirement age of 66, 67, or somewhere in between. This is important to know, as claiming benefits at age 65 will result in a permanent reduction” in benefit amounts.
• “Social Security is going broke, so I’d better claim early.” This commonly-repeated statement doesn’t present an accurate and complete picture, according to Motley Fool. “Here’s the short version of the true story,” says the article. “Social Security is currently sitting on reserves of nearly $3 trillion and is expected to run a surplus for the next several years.” It’s true that these reserves are expected to run out in 2034, but “Even if that happens, the incoming payroll taxes will still be enough to cover more than three-fourths of benefits.” What’s more, “there are several ways Social Security can be fixed, and this isn’t the first time Social Security’s financial state was in jeopardy. History tells us something will be done.” Needless to say, we hope so!
• “Social Security will be enough to live on in retirement.” It may be good to know that Social Security will probably be around, but the Motley Fool article warns against living with a false sense of financial security.  “It’s important to have a realistic idea of how much you need to save for a comfortable retirement, and not just rely on Social Security,” the article states. Social Security was designed to replace about 40 percent of an average worker’s income, but “experts generally suggest that you’ll need 70-80 percent of your pre-retirement income to maintain the same standard of living after you retire.”  In other words, plan ahead – don’t be naïve about your future financial needs.
• “I’ll never get back as much as I put in to Social Security.” “Many people think of Social Security as some type of scheme where you’ll never get as much in benefits as you put in. This simply isn’t true,” according to the Motley Fool article, which quotes a 2013 study by the Urban Institute analyzing the Social Security picture for the average two-earner couple with each spouse earning about $45,000 in 2013 dollars. This mythical couple, says the study, “would pay $816,000 in payroll taxes over their lifetimes but would end up getting more than $1 million in Social Security and Medicare benefits.” In almost every retirement scenario this analysis remains true: most retirees get out more from Social Security than they put in.
• “Stay-at-home parents and other non-working spouses aren’t eligible.” As long as one spouse earned benefits, even if the other spouse didn’t work at all, he or she is still entitled to a retirement benefit. “In a nutshell, the program gives a retirement benefit at full retirement age equal to half of the higher-earning spouse’s,” the article says. “This can be a major income boost for retired couples.”

So you probably guessed correctly that all five of these “common knowledge” statements are in fact false. As with everything that has to do with retirement, the more effectively you plan, the better equipped you’ll be to make smart decisions for you and your family. That’s where the professionals at AgingOptions can help. We have guided thousands of retirees into a future where they know their assets will be protected, they can avoid becoming a burden to their families, and they can prevent the sad fate of so many seniors who end up living in an institution against their will. The answer to achieving the retirement of your dreams is a LifePlan from AgingOptions, a comprehensive plan in which financial, legal, medical, housing and family strategies all blend together into a mutually supportive, interdependent whole.

Why not start 2018 with a fresh new perspective on these critically important questions about the future? Plan now to join Rajiv Nagaich at an AgingOptions LifePlanning Seminar – a free, information-packed session that will transform the way you think about the years ahead. It could be the most important few hours of the rest of your life! For dates, times and locations, click here to visit our Upcoming Events page where you can register online. Feel free to call us during the week for personal assistance.

Don’t labor any longer under misconceptions and misinformation about retirement. Join us soon, and start the LifePlanning process. Age on!

(originally reported at www.fool.com)