Five Burbank Social Security Benefits Myths That Aren’t True
Today’s uncertain economic times make many people worry about how the social security system works and its funding. Job insecurity and the many myths and misconceptions about social security benefits add to the worry.
Here’s an attempt at dispelling the five most common myths about Burbank social security benefits.
1. Social Security Benefits Compare to a Good Retirement Savings Account
False.
The government doesn’t save your exact payroll taxes into separate personal social security accounts to pay back with interest on retirement.
On the contrary, the amount you stand to receive depends on two factors:
- How much you earn while working
- How much you contribute to the system
So if you live a longer life, you end up receiving more benefits than you had paid.
However, do not entirely depend on social security benefits for all your retirement expenses. It alone is insufficient to live on after retirement because you generally receive about 40% of your pre-retirement income.
It’s better to have other financial options you can depend on for retired life.
2. Social Security Benefits Are Not Taxed
It was true, but only till 1984, which is why many people still think social security benefits are not taxed.
However, during Reagan’s administration, Congress passed an overhaul stating a portion of social security benefits was subject to tax.
It is your income level that determines the amount. And money received from these sources counts as your income:
- Pay for your job
- Pension and investment benefits
- Non-taxable interests
- Half your social security benefits
It’s, however, challenging finding out how much of your income is taxable as there are many probable scenarios. Besides, the rules for taxing social security benefits vary from state to state.
Your accountant or social security benefits lawyer in Burbank will help in clearing things.
3. Undocumented Immigrants Drain Social Security
This is the most common reason people worry about their social security benefits.
However, it is a lie.
Like native-born Americans, non-citizens living and working in the US and pay into Social Security qualify for social security benefits.
However, non-citizens receive benefits only if they live in the US and have paid into the system. Undocumented immigrants are not permitted to claim any social security benefits.
So there’s no need to worry about this myth.
4. Your Ex Receives Part of Your Social Security Benefits
It’s true that if divorced, your ex-spouse can collect benefits based on your pay-in to social security. You can also collect based on their lifetime earnings record.
However, it doesn’t mean that you receive fewer social security benefits.
You receive the benefits you are entitled to receive based on your age of filing and earnings history. You’re current, and even multiple ex-spouses will also collect benefits based on the span of your marriages.
5. Do Not Continue Working; You May Lose Your Social Security Benefits
It is okay to continue working and collect social security. However, there is a rule called the ‘earnings limit’ or ‘earnings test’ you have to abide by.
According to the rule, working people earning above a specific limit receive reduced benefits temporarily.
The rule applies to people who:
- Claim benefits before their full retirement age and
- Continue to work and
- Have earned more than that year’s earnings cap, which changes every year.
How Your Burbank Social Security Benefits Lawyer Can Help
With so many misunderstandings about social security benefits, it’s better to turn to an experienced lawyer for help. They will explain your social security benefits and help you receive the maximum compensation you legally deserve to receive.