Delaying your retirement age past 70 is a mistake: You will not get higher Social Security benefits

Since the rules of Social Security are not stagnant and change with the generations, it is completely expected that some new retirees won't be completely up to date on the facts, but nowadays even things that seem to be common knowledge and have remained the same for a while seem to escape older Americans who should already be studying up on how to make the most of the benefits and how to use the program correctly.

Mass Mutual, the life insurance company, commissioned a questionnaire that polled 1,500 Americans between 55 and 65 on 13 topics related to Social Security and found that 50% answered five or more questions incorrectly. This lack of education is concerning since accessing benefits is key for the economic survival of a large portion of the population.

3 top misconceptions about access to Social Security benefits

1. Delaying past 70 will continue to increase benefits

In all fairness this may not be your fault entirely. Everyone knows that accessing benefits before full retirement age decreases them by a fair amount, especially if you do so at age 62, the earliest you can collect, and that if you wait past full retirement age they continue to increase. The media harps on this point consistently to ensure that retirees wait as long as possible to claim their checks because it is better in the long run, which may explain why 51% of respondents got the question "If I delay taking Social Security benefits past the age of 70, I will continue to get delayed retirement credit increases each year I wait." wrong.

70 is, in fact when you should claim your Social Security check as there is no further benefits for waiting as of right now. Past this age your checks will not accumulate interest and thus increase, the only way they will be bigger is by a cost of living increase and that is independent of whether you collect or not. There may be a reason why a specific individual may chose to not collect their pension past this age, and maybe even a beneficial one for them, but for most people there is no reason to wait any longer to collect their check.

2. Taxes related to your benefits

"Social Security retirement benefits are subject to income tax just like withdrawals from a traditional IRA account." is one of the other statements 62% of respondents had trouble with. While it is true that Social Security benefits can be subject to taxes (both state and federal) it is far more complicated than IRA accounts.

The metric to decide whether or not your benefits are subject to tax is called "combined income", which is the sum of your adjusted gross income, untaxed interest income, and half your Social Security benefits. If it is higher than a certain amount, it will be subject to income tax.

3. You need to be a citizen to collect taxes.

The question that most interviewees (71%) got wrong is "I must be a U.S. citizen to collect Social Security retirement benefits." As a general rule, non-citizens that have worked legally in the U.S and had a Social Security number can receive benefits. This is even after they have returned to their home country. There are exceptions to the rule, but most workers will be eligible without much fuss.

They may also qualify for other benefits like spousal or survivor benefits even if they never worked in the U.S but their partner has, so looking into the specific cases would be a good idea for those who fall into this category.

Those who fall under DACA may also be able to qualify soon, as initiatives to allow this collective to receive work authorization and a Social Security number and work legally in the U.S are underway.