Tuesday, March 5, 2013

Common Social Security Myths Not to Believe Revealed

Whether you are or not a recipient of the Social Security benefits, there is no doubt that you have already heard the common rumors about it.

Nevertheless, although such rumors are already rampant in the American society, financial experts say that such common myths are false.

Recently, the entire society was shaken up by the alarming news stories about the upcoming expected date of exhaustion of the federal funds. However, many experts doubted it although the government reported that the Social Security program paid out more than the amount of taxes it received in 2012.

In fact, in a statement released by Jordan Goodman, president of Jordan Goodman Financial Communications, that was quoted below, he said:

“By that point, payroll taxes will flow into the fund and it will be sufficient to pay only 75% of its costs.. So if nothing changes, it will go broke. But it’s not about to happen tomorrow or next year.”

Apparently, in his point of view, he doesn’t believe that the federal government will let the exhaustion of federal funds to occur, not next year or in the next ten years. He is quite assured that lawmakers will definitely find a way to sustain the program since a lot of people rely on it.

Goodman further revealed other common social security myths, which according to him should not be believed.

Take social security as soon as you are eligible.

Unfortunately, taking Social Security fund as soon as a recipient is eligible is another reason the fund is going bankrupt in the next couple of decades. Goodman suggests that it is actually financially better to wait until you get 70 than taking it earlier.

Paying Social Security Taxes has NO limit

People tend to confuse Social Security taxes with Medicare taxes. Therefore, Goodman explained that tax payers only pay Social Security taxes on up to $113,700 income each year while when it comes to Medicare taxes, you can make $10 million and still pay it.

The Cost of Living Adjustment (COLA) is directly tied to the Consumer Price Index (CPI)

Goodman noted that although the CPI influences the adjustment amount, it doesn’t necessarily mean that it is always an exact dollar-for-dollar match.

Meanwhile, in their own perspective, several Los Angeles social security claim lawyers agree with Goodman’s point of view not only because he is an expert in the industry but because based on their own experiences, they all ended up in the same level of thinking.