3 Social Security Filing Myths That Could Cost Retirees Thousands

Group 1 - The common myth that individuals should claim Social Security benefits as early as possible due to fears of the program going broke is misleading; while there are financial challenges, the program is not at immediate risk of complete failure [2][3] - Claiming benefits early can lead to a permanent reduction in monthly payments, with a potential lifelong decrease of up to 30% for those born in 1960 or later if they file at age 62 [3] - If benefits are cut universally, claiming early would result in a smaller base amount being reduced further, emphasizing that decisions should not be based on fear of the program's sustainability [4] Group 2 - There is a misconception that individuals cannot work while receiving Social Security benefits; however, once full retirement age is reached, there are no earnings restrictions [5] - Prior to reaching full retirement age, there is an earnings test that could lead to benefits being withheld if income exceeds certain limits, but these limits may be more generous than commonly perceived [6] - It is advisable for individuals to check the annual earnings test limits before deciding to stop working after claiming benefits, as many may find their earnings fall below the threshold [6]