7 Social Security Myths That Can Cost Retirees Thousands
For many retirees, Social Security feels straightforward: you paid in for decades, and now it’s time to collect. Yet in practice, Social Security is one of the most misunderstood parts of retirement planning—and small missteps can create lifelong consequences.
Below, we break down seven of the most common Social Security myths we see among retirees and pre-retirees. Understanding these myths can help you make more confident, tax-efficient decisions that support your long-term financial security.
Myth #1: “I Should Take Social Security Early Before It Runs Out”
It’s natural to worry about headlines surrounding Social Security’s future. However, basing your decision solely on fear can be costly.
While program changes may occur over time, benefits for current and near-retirees are widely expected to be preserved in some form. Historically, changes have focused more on taxation or eligibility adjustments—not eliminating benefits for those already receiving them.
Why this matters:
Claiming early permanently reduces your monthly benefit. For many retirees, that lower income follows them for decades.
Myth #2: “The Break-Even Age Is All That Matters”
Many people focus exclusively on one question: How long do I have to live in order to break even?
While break-even analysis can be useful, it’s far from the whole picture. Social Security is not a math problem—it’s a cash flow decision.
Other considerations include:
- Your overall income needs
- Your spouse’s benefits
- Tax implications
- Longevity risk
- How Social Security fits into your broader financial plan
A decision that looks good on paper may not work in real life.
Myth #3: Ignoring Spousal Benefits
Spousal benefits are often overlooked, especially when one spouse spent less time in the workforce.
In many cases, a non-working or lower-earning spouse may be eligible to receive benefits based on their partner’s earnings record. However, when the higher-earning spouse claims early, it can permanently reduce what the other spouse receives.
Key takeaway:
Social Security claiming decisions should almost always be evaluated at the household level—not individually.
Myth #4: Overlooking Survivor Benefits
Survivor benefits are one of the most critical—and misunderstood—components of Social Security.
When one spouse passes away, the surviving spouse generally keeps the higher of the two benefits, not both. This makes the claiming strategy of the higher earner especially important.
Delaying benefits for the higher-earning spouse can:
- Increase lifetime income
- Provide greater financial security for the surviving spouse
- Help offset rising healthcare and living costs later in life
This is particularly relevant for couples planning for longevity and legacy.
Myth #5: “Working Won’t Affect My Social Security”
If you begin collecting Social Security before full retirement age (currently 67 for many pre-retirees) and continue working, your benefits may be temporarily reduced if your earned income exceeds certain limits.
In addition, income from work—or other sources—can trigger taxation of your Social Security benefits.
Important distinction:
Once you reach full retirement age, earned income no longer reduces your benefit—but taxation can still apply.
Myth #6: “Taxes Go Away in Retirement”
This is one of the most persistent—and dangerous—assumptions we encounter.
Many retirees are surprised to learn that:
- Up to 50% of Social Security can become taxable at moderate income levels
- Up to 85% can become taxable at higher income levels
- Social Security taxation stacks on top of other income sources
In some cases, retirees pay the same—or even higher—tax rates than during their working years.
This is why proactive tax planning matters, especially when coordinating withdrawals from IRAs, pensions, and investment accounts.
Myth #7: Not Coordinating Social Security With Investments
Social Security does not exist in a vacuum. It must be coordinated with:
- IRA and 401(k) withdrawals
- Pension income
- Investment income
- One-time expenses like travel, vehicles, or family gifts
Without coordination, retirees often discover—too late—that their withdrawals pushed them into higher tax brackets or caused more of their Social Security to become taxable.
A well-designed retirement plan ensures that each income source works together, not against the others.
Conclusion
Social Security is one of the most valuable benefits you’ll ever receive—but it’s also one of the easiest to misunderstand. The difference between a rushed decision and a coordinated strategy can mean tens or even hundreds of thousands of dollars over retirement.
By avoiding these common myths, you put yourself in a stronger position to protect your income, reduce taxes, and create long-term confidence in your plan.
Call to Action
If you’re within a few years of retirement—or already collecting Social Security—it’s not too early (or too late) to review your strategy.
Schedule a complimentary 15-minute introductory call to discuss how Social Security fits into your overall retirement and tax plan. A short conversation today can help prevent costly surprises tomorrow.
Fortress Financial Group LLC (“FFG") is a Registered Investment Advisor. Advisory services are only offered to clients or prospective clients where FFG and its representatives are properly licensed or exempt from licensure. For current FFG information, please visit the Investment Adviser Public Disclosure website at www.adviserinfo.sec.gov by searching with FFG’s CRD# 315329
This material is provided for informational purposes only and should not be construed as personalized tax or investment advice. Please consult with your financial, tax, or legal advisor to determine how this may affect your overall financial plan.
