NEW YORK ( BankingMyWay) -- Given the fact that millions of Americans count on Social Security to bolster their retirements, it's a mystery why so many people have a skewed viewpoint on one of Uncle Sam's most critical entitlements.

Certainly, many Americans are counting on Social Security as their prime source of income in retirement.

A recent study by the Bankers Life and Casualty Co. Center For A Secure Retirement shows that 72% of U.S. adults are counting on Social Security to make up half their retirement savings. Another 29% say Social Security will be three-quarters of all their retirement income.

"Most Americans will rely on Social Security to fund their retirement years, but the program was never designed to replace all of your income," says Chris Campbell, vice president of marketing and business development at Bankers.

That's a big reason why Americans can use some clarity on Social Security. Dispelling some common myths can help future and current retirees know where they stand on Social Security and get the most out of it.

"With all of the dates, deadlines and rules about spousal benefits, eligibility requirements and taxes, there are a lot of variables to keep track of when it comes to Social Security," says Carrie Schwab-Pomerantz, president of the Charles Schwab ( SCHW - Get Report) Foundation. "Add in rumors about the future of Social Security, and it becomes a bit challenging for people to separate fact from fiction. That's why it's important to talk with a professional, ask the right questions and make the program a part of your bigger financial plan."

To get Americans started, Pomerantz dispels five of the most common Social Security myths. Here's a look:

I should start taking Social Security benefits as soon as I'm eligible. Pomerantz says that even though you're eligible to begin getting Social Security at age 62, that doesn't mean you should cash out at that point. "Benefits increase by 8% for every year you wait to collect to age 70, so withdrawing money before then will permanently reduce your benefits," she says.

It's always best to wait as long as possible before taking benefits. Waiting until age 70 to get Social Security helps you gain the maximum amount owed to you by the federal government, but everyone's circumstances are different. "If you collect early, you get a smaller payment for a longer time period, and if you collect later, you get a larger payment for a shorter time period," Pomerantz says. "Do the math to see what's best for you."

If my spouse earns more than I do, I should take the spousal benefit. That's not necessarily the best idea, depending on your personal financial situation. Pomerantz says the spousal benefit makes sense for a nonworking or a spouse with little income, but notes that it's only half of the higher-earning spouse's benefit. "Once you file, the Social Security Administration will automatically give you the larger of either the spousal benefit or your own benefit," she says.

Benefits are based on your 10 highest-earning years. Pomerantz says there is a myth circulating that Social Security payouts are based on a worker's top 10 earning years. But that's not the case. While it does take 10 years to qualify for Social Security, a retiree's payout is based on the average indexed monthly earnings in his or her 35 highest-earning years after age 21. "If you worked fewer than 35 years, the missing years are counted as zero, which brings your average down," she says.

You don't pay income taxes on SS benefits. Social Security benefits aren't tax free, although many Americans believe that's the case. "One of the biggest misconceptions is not having to pay income taxes on social security benefits," Pomerantz says. "In reality, 50% to 85% of benefits may be taxed depending on your modified adjusted gross income."