📋 10 Myths and Misconceptions About Social Security (AARP Article - updated)

[Winter2025VA]

FROM THE ARTICLE:

10 Social Security Myths That Refuse to Die.

The program is going broke, the retirement age is 65, and other common misconceptions.

By Andy Markowitz, AARP.

Published August 25, 2020.

➡️ Updated January 10, 2025. ⬅️

Security is enormous and complex, paying out more than $120 billion each month to 68.4 million retirees, people with disabilities and their family members. It's wildly popular: According to a May 2024 AARP study, 90 percent of U.S. adults ages 50 and older view Social Security as critical to retirement security. And it is key to older Americans’ financial health, providing a majority of family income for 2 in 5 people ages 65 and older.

Given Social Security's importance, concerns about its current and future state are understandable and widespread. Some of those worries, and the many changes to the program in its eight-plus decades, have given rise to misconceptions about how it is funded and how it works. Here are the facts behind 10 of the most stubborn Social Security myths.

USE THE LINK BELOW TO READ THE LINK: https://www.aarp.org/social-security/myths-misconceptions-explained/

[GailL1]

A slight correction to MYTH# 1 - the article said: [copy paste]

Social Security does face funding challenges. For decades it collected more than it paid out, building a surplus that stood at $2.79 trillion at the end of 2023, the most recent data available. But the system is starting to pay out more than it takes in, largely because the retiree population is growing faster than the working population, and living longer. Without changes in how Social Security is financed, the surplus is projected to run out in 2035, according to the latest annual reportfrom the program's trustees.

Even then, Social Security won't be broke. It will still collect tax revenue and pay benefits. But it will only bring in enough to pay 83 percent of scheduled benefits, according to the latest estimate. To avoid that outcome, Congress would need to take steps to shore up Social Security's finances, as it did in 1983, the last time the program nearly depleted its reserves.

The Correction:

But the 2024 Social Security Trustee Report says the above is ONLY the case IF the Old Age, Survivors Trust Fund is combined with the Social Security Disability Trust Fund - right now they are separate Trust Funds and are funded and paid out as such.

IF we take these Trust Funds separately it is slightly different in the calculations.  From the 2024 Social Security Trustee Report:  [copy/paste]

Based on our best estimates, this year's reports show that:

• The Old-Age and Survivors Insurance (OASI) Trust Fund will be able to pay 100 percent of total scheduled benefits until 2033, unchanged from last year's report. At that time, the fund's reserves will become depleted and continuing program income will be sufficient to pay 79 percent of scheduled benefits.

• The Disability Insurance (DI) Trust Fund is projected to be able to pay 100 percent of total scheduled benefits through at least 2098, the last year of this report's projection period. Last year's report projected that the DI Trust Fund would be able to pay scheduled benefits through at least 2097, the last year of that report's projection period.

• If the OASI Trust Fund and the DI Trust Fund projections are combined, the resulting projected fund (designated OASDI) would be able to pay 100 percent of total scheduled benefits until 2035, one year later than reported last year. At that time, the projected fund's reserves will become depleted and continuing total fund income will be sufficient to pay 83 percent of scheduled benefits. (The two funds could not actually be combined unless there were a change in the law, but the combined projection of the two funds is frequently used to indicate the overall status of the Social Security program.)

Posted for accuracy in the article.