Social Security is the ultimate messiah that takes care of your financial needs when you get old or develop a disability. In America, the official name of Social Security is Old Age, Survivors, and Disability Insurance (OASDI). If you are new to this subject, bear in mind that Social Security is not a government funded retirement plan. Current workers pay a tax called the Federal Insurance Contributions Act (FICA) which is used in funding the Social Security payments to current retirees.
3 Social Security myths that you need to be aware of.
1. You should start taking Social Security when you turn 65
This is a myth that if taken seriously can severely impact your Social Security payments. The correct age to begin taking Social Security is between your 66th and 6th birthday. It is recommended to take it later when your turn 72 as it will difficult to work and earn money at that age. By opting to take Social Security later, it grows each year by 8 percent.
2. There are no taxes on your Social Security benefits
Whether you file for Social Security as a married couple or an individual, you will have to pay income taxes on it. Social Security income is taxable for individuals having a total income more than $25,000 and married couples having a combined income of more than $32,000. So, do not be under a false assumption that your Social Security income won’t be taxed by the government.
3. Young people don’t need to worry about Social Security
This is a total myth as young people need to know everything about Social Security and how they can leverage its benefits when they grow older. You are on the right track if questions like “Will social security still be there when I retire?” come to your mind at an early age. Even if you are in your 40’s or 50’s, you should hire a finance expert or read blogs like this one to educate yourself on Social Security.
Will Social Security still be there when you retire?
There are no legitimate studies to prove that Social Security is not going to be there when you retire. I have heard many people say that Social Security is going to go bankrupt by the year 2034 and Americans will have to rely solely on their retirement savings when they get old. But these people don’t have enough data to prove the legitimacy behind their statements.
So, as a clear headed and rational person, I will say that Social Security will definitely be still there when you retire. Maybe the terms and conditions will change. The American government will definitely take care of retirees and disabled people in one way or another. According to the Social Securities website, 67 million Americans will see a 2.8 percent increase in their Social Security and Supplemental Security Income (SSI) benefits in 2019. They update the citizens every year by announcing the annual cost-of-living adjustment (COLA). And it has been seen that there has been a steady increase in the benefits received by the retirees each year. So, Social Security is not going anywhere.