Since the 1930s, the U.S. government has introduced programs to make life easier for senior citizens, such as Social Security, Medicare, food assistance, and senior housing. Even after nearly 100 years, myths and misunderstandings continue to surround Social Security, the most widely used retirement benefit program.
Here are the five most common Social Security myths and the truths behind them.
Myth 1: Social Security is going bankrupt, so you should claim benefits early
Reality: Many people fear Social Security will run out of money soon. This has caused more retirees to claim benefits earlier than planned. In fact, first-time Social Security claims rose 13% compared with last year, partly due to anxiety.
Yes, the trust fund is projected to run out by 2033, but that does not mean benefits will disappear. In 1983, when the fund was nearly empty, Congress acted to stabilise the system for decades. It still has the power to do so again.
Claiming benefits too early can hurt you in the long run since it permanently reduces your monthly check, while waiting longer can maximise your payments.
Myth 2: Baby Boomers are the main reason for Social Security shortages
Reality: It is not Boomers but the falling U.S. birth rate that has created funding challenges. In 1983, there were 73.2 births per 1,000 women, but by 2024, that dropped to 54.6 births.
Social Security works because current workers pay taxes that fund benefits for retirees. Fewer births mean fewer workers, and therefore, fewer contributions to the system.
Myth 3: Social Security benefits are too small to make a real difference
Reality: The average monthly Social Security check is around $2,000, or about $24,000 per year. While this may not seem like much, it plays a huge role in keeping seniors out of poverty.
In 2023, Social Security kept 16.3 million seniors above the poverty line. Without it, the senior poverty rate would jump from 10.1% to 37.3%. Clearly, Social Security is a lifeline for millions of retirees.
Myth 4: Social Security adds to the U.S. deficit
Reality: Social Security is a self-funded program. It does not contribute to the federal deficit. The funds come mainly from FICA payroll taxes, which are 12.4% of wages (split between employers and employees).
The program also gets money from interest on its reserves and taxes on benefits. This keeps it financially separate from the federal budget.
Myth 5: There’s no hope of receiving full Social Security benefits
Reality: While funding challenges exist, solutions are possible. Congress has several options to strengthen the system, such as:
Raising payroll tax rates
Eliminating the taxable income cap
Taxing employer health insurance and benefits
Investing some of the trust fund in stocks
Adding workers not currently covered (like some state/local employees)
Increasing the retirement age gradually
Reducing benefits for high earners
A combination of these measures could keep Social Security sustainable, provided there is bipartisan support.
Why Knowing the Truth Matters
Falling for myths about Social Security can lead to poor financial choices, such as claiming too early or assuming your benefits are at risk. By understanding the realities, you can plan smarter for retirement and protect yourself against scams that target seniors.
