Government programs are often very confusing. Social Security is no exception. In the same way that filing your taxes is complicated and burdensome, signing up for Social Security — or considering deferring until later — is a bamboozling prospect. Even if you look for simplified explanations or seek professional help, you can end up with more questions than answers.
Many people, even as they approach retirement age, are woefully unprepared or ignorant of the Social Security system. Sure, they might know how it works on a very basic level. But as far as devising a strategy and using the system to their benefit? Most of us are probably willing to let the chips fall where they may and take whatever we get.
Why is that, though? Why don’t we know anything about the Social Security system? There’s no easy answer. It’s most likely a combination of the system’s complexities, the incredible degree to which benefits differ from one person to the next, and the mind-numbing minutiae that go into studying it at a deeper level. For these reasons and more, there are still many myths and misconceptions about Social Security among the American populace.
A new survey from Fidelity exposes many of those misconceptions and helps give us a little understanding as to why there’s so much confusion.
“Social Security-related decisions can be complex, with a number of trade-offs associated with the various payment strategies. This decision can be challenging and may be dependent upon several factors, including one’s financial situation, health and lifestyle considerations and the needs of your immediate family,” said Ken Hevert, senior vice president of Retirement at Fidelity.
“However, with some basic guidance and a sound retirement plan in place, it’s much easier to make an informed decision and get the most out of your benefits,” he continued.
Drawing from the survey, let’s take a closer look at some of the most confusing elements of the Social Security system