CBS News “Money Watch” recently aired a segment on the 5 most common misconceptions about Social Security. These misconceptions are:

1.) You must be a U.S. Citizen to receive Social Security benefits.

False. If you are a resident alien and have a green card which permits you to live and work in the U.S., you may qualify to receive Social Security benefits as long as you meet other criteria, such as having worked for 10 years in the U.S.

2.) The full retirement age for receiving Social Security Retirement benefits is 65.

False. The Social Security Administration determines your full retirement age, which is the age when you can receive your full retirement benefit, based upon the year of your birth. For people born between 1943 and 1954 (the baby boomers) that age is 66. For people born after 1954 your full retirement age ranges from 66 and 2 mos of age to age 67. All workers may retire and receive benefits at age 62, but the amount you receive will be less than if you wait until your full retirement age to start receiving benefits. Medicare benefits, however, do start at age 65.

3.) If you continue to work after retirement, regardless of your age, you will have to give back some of your Social Security Retirement benefits.

This is only true if you choose to start receiving your Social Security Retirement benefits before your full retirement age. If you start receiving your retirement benefits before your full retirement age, for every 2 dollars ($2.00) you earn above a certain limit, Social Security will withhold $1.00 of your benefit. The earnings limit in 2015 is $15,720. If you continue working past your full retirement age, you are not subject to the earnings limit and your benefit will not be affected by your wages.

4.) I can collect Social Security benefits based on my ex-spouses earnings history.

This is true only if you and your ex-spouse were married for at least 10 years, you are over 62, and you have not remarried. You must meet each of these 3 criteria to get benefits based on your ex-spouse’s earnings history. This benefit is gender neutral and applies to both ex-husbands and ex-wives.

5.) If my spouse passes away, I can receive his or her Social Security Retirement benefit as well as my own.

Sorry, this is not true. This is referred to as “double-dipping” and it is not permitted. When your spouse dies, you can collect his or her benefit, rather than your own benefit, but you would not want to do this unless your deceased spouse’s benefit amount was greater than your own.

If you have any questions about social security benefits and what you are entitled to, it is recommended that you consult with experienced legal counsel about your situation.

Immigrants who receive provisional legal status under President Obama’s new executive orders may be eligible for Social Security and Medicare or Medicaid benefits.  Under the President’s plan, U.S. residents can apply for provisional legal status if they have  lived in the U.S. for at least 5 years, can pass a criminal background check and have paid their share of taxes.

Provisional legal status, which must be renewed every 3 years, would allow qualified residents to obtain legal work permits and a Social Security number.  Consequently, they would pay into Social Security and Medicare through payroll taxes and thusbe eligible for benefits. Only those years after they obtain provisional legal status would count towards Social Security benefits and these individuals would have to work at least 10 years, legally, in the U.S., to receive Social Security Retirement benefits.

If your spouse has already filed for his or her Social Security Retirement Benefit, and you have reached full retirement age (66 for the current crop of baby boomers), you can receive a monthly spousal benefit equal to half of your retired spouse’s full retirement benefit.  You can do this yourself without filing for your own retirement benefit, to which you will continue to contribute if you are still working.  The spousal benefit is not deducted from your retired spouse’s monthly check, so there is no diminution in the amount your retired spouse receives.

You can receive a monthly spousal benefit if your spouse is retired but you have not reached your full retirement age but if you take the spousal benefit before your full retirement age, you will be deemed to be filing for your retirement benefit, as well.  Your spousal benefit is then considered excess and it will definitely be less than half of your retired spouse’s full retirement benefit, and may even be zero.

Example:  Mary is going to be 66 next month.  She is working and intends to keep working for a number of years.  Her husband, John, is 70 and he retired a few years ago.  John’s full retirement benefit is $2,000 per month.  When Mary turns 66, she is entitled to half of John’s monthly benefit, $1,000 per month, despite the fact that she is still working.  Once she begins receiving her monthly spousal benefit, John will continue to receive a monthly benefit of $2,000 per month.

If you are interested in getting spousal benefits, you should make an appointment with your local Social Security Administration office to apply for the spousal benefit.

A recent study by researchers at Stanford University and Harvard University has shown that if a private health plan manages to negotiate lower prices with health care providers, they may make up the difference by providing health care to Medicare beneficiaries. The study examined data from more than 300 geographic regions in the U.S., including Medicare spending on inpatient and outpatient care as well as prescription drugs for fee-for-service beneficiaries.  The researchers found that a 10% lower private price for health care services is associated with a 3% increase in Medicare spending per member, per year, and 4.3% more specialist visits.

Many individuals take an early retirement, at age 62, the youngest age at which you can currently receive your Social Security retirement benefit, thinking that they can get a better return on their money by investing the amount they receive from Social Security.  Most retirement experts do not advise this course of action.  First of all, if you take your retirement benefits before age 66 (the current “full retirement age” for Social Security) you will receive a lower amount than if you wait until age 66.  In addition, you will be stuck at this lower amount as long as you receive benefits.  Any higher return you might anticipate receiving from investing in the stock or bond market, relative to the amount you receive from Social Security, is not without risk.  If you invest in a safe asset, such as a Treasury bill, you are unlikely to get more than the approximately 3% return that Social Security incorporates when it raises your benefits as a reward for delaying in taking them.

If you wait until age 70 to take your retirement benefit, your Social Security benefit will increase by 8% for every year between age 66 and age 70 that you postpone taking the benefit.  In addition, if you continue to work beyond age 66, you will continue to contribute to your retirement fund, thereby increasing the base amount of your monthly income benefit.

If you work for more than one employer in your career, including both employers that do not withhold Social Security payroll taxes and employers that do withhold SS payroll taxes, the pension you receive from the employer who doesn’t withhold payroll taxes may reduce your overall  Social Security Retirement benefits.

Many people do not become aware of the windfall reduction until they apply for their Social Security Retirement benefits and SSA learns that the applicant is also entitled to a “private” pension from a non-withholding employer.

Social Security utilizes a formula to determine the reduction to the retiree’s benefits.  In 2014, the maximum reduction is $408.  There is a limit to the reduction for retirees with a small pension.  If you are entitled to a pension from a non-withholding employer, contact your local SSA office to discuss the implications that the pension will have on your Social Security Retirement benefit before you retire.

If you have questions about what you are entitled to, contact Stark & Stark today