The 6 Biggest Social Security Misconceptions

A 2025 study reported that just 16% of Americans consider themselves “very informed” about Social Security. Even within this group, some misconceptions remain, and these false “facts” can be so ingrained that it is difficult to separate truth from popular fiction.

The first step in increasing your Social Security knowledge is unlearning this incorrect information. Start by reviewing the following common Social Security misconceptions, and their factual counterparts.

Misconception #1: Social Security Benefits Are Tax-Free or Fully Taxed

On the taxation of Social Security, there are 2 common misconceptions. Some people believe their benefits won’t be taxed at all, while others believe benefits will be taxed like any other kind of income. Both are wrong in most cases.

The amount of your Social Security benefits that are subject to tax can be 0%, 50% or 85%, depending on your Provisional Income. This special calculation is your Adjusted Gross Income plus Nontaxable Interest plus ½ of your Social Security benefits.

To see how much of your benefits are subject to tax, compare your Provisional Income to these thresholds and their associated tax burden.

• 0% of benefits are taxed for individuals who have Provisional Income below $25,000 or $32,000 for joint filers.
• Up to 50% of benefits are taxed for individuals who have Provisional Income between $25,000 and $34,000 or between $32,000 and $44,000 for joint filers.
• Up to 85% of benefits are taxed for individuals who have Provisional Income above $34,000 or $44,000 for joint filers.

Unlike most types of U.S. taxation, the provisional income levels are not adjusted for inflation each year. For this reason, the amount of your Social Security benefits that are subject to tax could increase each year due to the annual Cost-of-Living Adjustment and additional income you may receive from other sources.

2. You Qualify for Full Benefits at Age 65

Age 65 is widely considered the standard retirement age, and it is the age at which you can begin Medicare. However, it hasn’t been the age at which you can claim your full Social Security benefit since a legal change in 1983.

Instead, you get full Social Security benefits at your Full Retirement Age, which varies depending on your birth year. This age is:

• 66 if you were born between 1943 and 1954
• 66 and 2 months if you were born in 1955
• 66 and 4 months if you were born in 1956
• 66 and 6 months if you were born in 1957
• 66 and 8 months if you were born in 1958
• 66 and 10 months if you were born in 1959
• 67 if you were born in 1960 or later

This is the age at which you can claim your “full” retirement benefit. You can also choose to claim a partial benefit as early as age 62, or you can delay claiming up until age 70 to receive a higher check amount.

3. You Can Claim Spousal Benefits, Then Switch to Your Benefit

This misconception is based on fact. Prior to the Bipartisan Budget Act of 2015, a married person could claim spousal benefits while delaying their own benefits using a “restricted application.” This type of application allowed the person to grow their own retirement benefit until age 70 while receiving Social Security spousal benefits to bolster their income.

Congress closed this loophole in 2015 for everyone born on or after January 2, 1954. Anyone born after that date is subject to “deemed filing” rules, which mean that at the time you file for either retirement or spousal benefits, you are deemed to have filed for the other benefit as well.

In essence, you receive the highest benefit possible for you at the time you apply – whether that is spousal benefits or your own retirement benefit. However, it is important to note that deemed filing rules don’t apply to survivor benefits or spousal benefits if you are caring for a retired worker’s minor child.

4. Your Social Security Benefit is Based on Your Salary at Retirement

The misconception that your Social Security benefits are based on your salary in the year you retire is not entirely wrong, but it isn’t correct either. Your benefits are determined based on your earnings from your highest 35 years of income, which could include your final year of work.

Your prior salaries are adjusted for inflation to account for increasing wages over time. However, only the amount you earned up to the Contribution and Benefit Base is counted toward your Social Security benefit calculation. This is an annual threshold above which you were not taxed to pay for Social Security, so the untaxed income is not used to calculate your benefits at retirement.

5. Claiming Early Won’t Impact Your Benefits

Early retirement can affect your benefits in three ways, depending on your work history and the age at which you choose to retire. First, benefits are permanently reduced if you claim them before FRA. Second, early retirement could result in zeros in your benefits calculation. Third, you could be subject to the earnings test if you continue to work after claiming.

As previously mentioned, your monthly income from Social Security is reduced if you claim benefits early. Claiming at the earliest possible age, 62, reduces benefits by 30% for people born in 1960 or later. This reduction is permanent and applies even after you reach FRA.

If you retire before working 35 years, your benefit calculation is completed with zeros in place of a salary for the years you didn’t work. Similarly, if you earned significantly more at the end of your career than at the beginning, you could see a reduced benefit by retiring early compared to continuing to work at the higher salary. This is an especially important consideration for parents who paused work or reduced their hours to spend more time with their children while they were young.

Finally, the earnings test is a special rule that applies if you claim benefits before FRA and continue to work. It withholds a portion of your benefits for every dollar you earn over certain thresholds. Then, at FRA, your benefit is recalculated to spread the withheld benefits over the rest of your life.

6. Social Security is “Going Away”

There is no telling what the future holds, but for now, there are no concrete plans to do away with Social Security. Instead, this misconception generally stems from research showing that the Social Security trust fund reserves will be exhausted around 2034.

Before that time, Congress will need to act to ensure all Social Security benefits continue to be paid. The Social Security Administration estimates that taxes are able to fund about 81% of benefits after the trust fund is exhausted, so the remaining 19% will need to come from higher taxes or another source. Despite these complications, there doesn’t appear to be a political appetite to end Social Security anytime soon.

Get Answers to Your Social Security Questions from Brookstone Wealth Management

At Brookstone Wealth Management, our team of advisors has the answers to your most pressing Social Security questions. We focus on helping people prepare for retirement and maximize their government benefits, including Social Security.

Our comprehensive wealth management program, Financial Fingerprint®, includes a customized plan to help you maximize Social Security and other sources of retirement income. This plan adapts to your changing circumstances to help keep pace with your life.

To learn more and get started, contact us today.