Myths and facts about Social Security
Myth: Social Security will provide most of the income you need in retirement.
Fact: It's likely that Social Security will provide a smaller portion of retirement income than you expect. There's no doubt about it--Social Security is an important source of retirement income for most Americans. According to the Social Security Administration, more than nine out of ten individuals age 65 and older receive Social Security benefits. But it may be unwise to rely too heavily on Social Security, because to keep the system solvent, some changes will have to be made to it. The younger and wealthier you are, the more likely these changes will affect you. But whether retirement is years away or just around the corner, keep in mind that Social Security was never meant to be the sole source of income for retirees. As President Dwight D. Eisenhower said, "The system is not intended as a substitute for private savings, pension plans, and insurance protection. It is, rather, intended as the foundation upon which these other forms of protection can be soundly built."
Myth: If you earn money after you retire, you'll lose your Social Security benefit.
Fact: Money you earn after you retire will only affect your Social Security benefit if you're under full retirement age. Once you reach full retirement age, you can earn as much as you want without affecting your Social Security retirement benefit. But if you're under full retirement age, any income that you earn may affect the amount of benefit you receive:
• If you're under full retirement age, $1 in benefits will be deducted for every $2 you earn above a certain annual limit. For 2013, that limit is $15,120.
• In the year you reach full retirement age, $1 in benefits will be deducted for every $3 you earn above a certain annual limit until the month you reach full retirement age. If you reach full retirement age in 2013, that limit is $40,080.
Myth: Social Security benefits are not taxable.
Fact: You may have to pay taxes on your Social Security benefits if you have other income. If the only income you had during the year was Social Security income, then your benefit generally isn't taxable. But if you earned income during the year (either from a job or from self-employment) or had substantial investment income, then you might have to pay federal income tax on a portion of your benefit. Up to 85% of your benefit may be taxable, depending on your tax filing status (e.g., single, married filing).
Broadridge Investor Communication Solutions, Inc., Copyright 2013.
Securities offered through Securities America Inc., Member FINRA/SIPC and advisory services offered through Securities America Advisors, Inc. Armstrong Advisory Group, Cushing & Dolan, WRKO and The Securities America Companies are unaffiliated. Representatives of Securities America Inc. do not provide legal or tax advice. The scenarios provided are for illustrative purposes only and not intended to represent client experiences of Armstrong Advisory Group or the Securities America companies. Please consult with a local attorney or tax advisor who is familiar with the particular laws of your state. January 2013
Securities offered through Securities America, Inc. Member FINRA / SIPC. Advisory Services offered through Securities America Advisors, Inc., an SEC Registered Investment Adviser. Armstrong Advisory Group and the Securities America companies are unaffiliated.
We are licensed to sell securities in the following states: AZ, CA, CT, FL, GA, HI, MA, ME, MO, NH, NJ, NY, PA, RI, SC, SD, VA, VT, WA. We are RIA licensed in the following states: MA, NH. We are licensed to sell insurance in the following states: AZ, CT, FL, ME, MA, NH, NJ, RI, VT. Securities America and its Representatives do not give tax or legal advice. Please consult an appropriate professional regarding your particular situation.