FINANCIAL FOCUS: Three Social Security Myths: What You Need to Know
Social Security is a cornerstone of retirement planning for millions of Americans. But with so much information floating around, it’s easy to get confused about how the program really works. Here are three common myths that could affect your retirement planning.
Myth 1: Social Security is going bankrupt. Based on current projections, Social Security isn’t going bankrupt. According to the 2025 Social Security Trustees Report, if no changes are made to the program, it will need to reduce benefits in 2033, paying about 77 cents per dollar of the projected benefit.
This might sound concerning, but Congress has options to fix the shortfall. They could remove the earnings cap on payroll taxes, increase the tax rate or adjust retirement ages. With 79% of Americans opposed to cutting Social Security benefits (Pew Research Center 2024), lawmakers may feel pressure to act before 2033.
• What you can do: Focus on what you control. Social Security typically replaces about 40% of pre-retirement income for median earners who claim at full retirement, per the Social Security Administration in 2025. The rest must come from savings. Consider working with a financial advisor to make sure you’re saving enough. And don’t claim benefits early just because you’re worried about the program’s future – early claiming can permanently reduce your monthly payments up to 30%.
