Social Security hidden facts: Think you know Social Security? These 3 hidden facts could change your benefits

Social Security benefits announced: Many Americans think they have a general understanding of how Social Security works, that you pay into the system throughout your career and receive monthly checks for life in retirement. In fact, most people know that higher lifetime earnings often translate into greater benefits. But beyond that, some of the program’s rules remain surprisingly misunderstood.

These gaps in understanding can cost retirees money, sometimes for decades. Here are three key Social Security facts that often go unnoticed but could meaningfully change the benefit you ultimately receive, according to a report.

Your Highest Earning 35 Years Really Matter for Social Security Benefits

An important aspect of the Social Security formula is your average indexed monthly earnings (AIME), which is the inflation-adjusted average of your 35 highest-earning years. That means, according to the Motley Fool report, you don’t need to work for 35 years to get benefits, just earning 40 credits is enough. While earning one credit in 2025 will require $1,810, it will increase to $1,890 in 2026 and you will be able to earn up to four credits each year.
But if you have fewer than 35 years of employment, the missing years are filled with zero-income years that reduce your earnings. Since most people earn more later in their careers, continuing to work can replace earlier low-earning years and increase your future checks.

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Age Claim May Increase or Decrease Your Monthly Social Security Benefit

Your earnings record determines the primary insurance amount (PIA) you receive at full retirement age (FRA). For anyone born in 1960 or later, that age is 67. Claiming benefits before FRA reduces your checks by up to 30% depending on how early you file, and according to the Motley Fool, delaying benefits after FRA increases your monthly payment until age 70; This period indicates that your aid is no longer increasing. Delaying isn’t always the best financial choice for everyone. People with limited savings may not be able to wait, while those with a shorter life expectancy can claim earlier and receive more total money. Choosing the right time depends on your financial situation and health.

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Social Security Was Never Designed to Cover All Retirement Costs

While many retirees rely heavily on their monthly checks, Social Security was designed to cover only 40% of the average worker’s pre-retirement income. Some people get a little more or less, but it was never intended to serve as a complete source of income.

With less than a decade until potential benefits cuts, having additional sources of income is becoming increasingly important, according to The Motley Fool. These may include:

• Retirement savings in an IRA or 401(k)
• Health savings account (HSA) funds, which can be used penalty-free (but are still taxed) for non-medical expenses after age 65
• Part-time work for additional salary and social connection
• Government assistance programs offered through state social service agencies

FAQ

Can I collect Social Security benefits before age 67?
Yes, but doing so can reduce your monthly check by up to 30%.

How is my monthly benefit amount determined?
It is based on your primary insurance amount (PIA) from your earnings records.