Americans rely on Social Security after retirement, thinking it is enough to sustain them. However, social security benefits come with several false promises that may leave you in poverty later on. Currently, the checks are based on outdated regulations and do not fit the financial needs.
Even if you get the benefits, you’ll still need surplus savings to live a comfortable life. We’ll dive into some social security myths that people often believe in and what they may do instead.
Social Security is enough to support your retirement
As the cost of living is rising, the average $1,900/month checks will not be enough to sustain you. If you have liabilities and dependent people on you, along with your own housing and medical bills, it won’t be enough. The checks may cover your basic expenses, but they will not sustain your lifestyle. Take it as a supplemental income and not as a whole, and plan accordingly.
US Social Security is now projected to run out of money by 2033, and medicare by 2031.
Bloomberg now says $3 million to $5 million is needed for retirement.
Here’s everything you need to know about investing for retirement (so you don’t work forever):
— Andrew Lokenauth | TheFinanceNewsletter.com (@FluentInFinance) April 2, 2023
You’ll always get what you’re owed
The funds are shrinking, and many people may not receive the whole of what they are supposed to. Currently, the system is unsustainable and is projected to last only 8-10 years. As more and more people are relying on these checks, the administration is finding it hard to fulfill everyone’s needs. So they may make changes that could impact what you receive. You may get 20-25% cuts on yours.
The right timing is early on
Many people get confused and try to take social Security earliest at 62. But this leads to reduction in payments. However, if you wait till 67-70 your benefits will increase every year leading from 62. So it’s smarter to wait and let the checks get bigger.
I’ll pay no taxes
There are some talks about Trump making the checks tax-free, but that hasn’t happened yet. Meanwhile, your 85% security benefits are taxable depending on your pension and other savings.
🚨 SS TAX FAILURE: Trump promised NO TAX on Social Security, but Seniors now ONLY get a $4,000 deduction in the “Big Beautiful Bill”.
A Senior Citizen on $60K income will now pay $2,082 in additional tax on Social Security vs. $0 tax on what Trump promised.
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— Publius (@OcrazioCornPop) May 15, 2025
No need to save for retirement
Another huge financial lie that people believe in. Social security benefits do not exempt you from making any savings for your future. You may need money for medical bills, housing, travel, and just to sustain the cost of living. Try to save through passive incomes, 401(k)s, investments, brokerage, and IRAs to ensure financial security.
Learn about how Social Security works and what amount you’ll be owed. Know the best time to apply for the security checks. Applying for it too late may give you bigger checks, but it will take years to break even. So you’d have to be in good health and alive by then for it to happen. Applying too early may leave you with smaller checks. So, make sure you have the right number of work years before you retire at 65 or 67.
Don’t fall for lies, and have savings to ensure your survival, even at the high cost of living. You may choose diverse savings in different areas so that you may rely on them once you retire. Know your full income to pay the right taxes, as your social security checks may or may not become tax-free in the future. So be realistic about your financial goals and stay informed with new updates.
