The Future of Social Security: 5 Myths People Get Wrong

Few financial topics spark as much anxiety as Social Security. For many retirees, the program represents decades of contributions and a critical piece of their income. Yet headlines often declare that Social Security is “going broke,” leaving people unsure of what to expect.

The truth is more balanced. Social Security does face real funding challenges, but it is not disappearing. With thoughtful planning and a clearer understanding of how the system works, retirees and pre-retirees can make more informed decisions about their future.

Let’s address some of the most common myths and what they mean for your retirement income.

Myth #1: “Social Security is going bankrupt.”

This is the fear that makes the most noise — and it can easily lead to rushed decisions. Social Security’s long-term projections do show that the trust funds helping supplement benefit payments are expected to face shortfalls in the 2030s. However, that does not mean the program will cease to exist. Even without reform, incoming payroll taxes are projected to be enough to cover the majority of scheduled benefits.

In other words, the system isn’t shutting down. If no legislative changes are made, benefits would likely be reduced — not eliminated. While that scenario isn’t ideal, it is far less severe than the “bankruptcy” narrative used in headlines.

Myth #2: “Only younger workers will be affected.”

It is easy to assume that any major adjustments will fall on future generations, not those already in or near retirement. Historically, though, reforms have spread responsibility across multiple groups. Changes may include adjustments to full retirement age, benefits for high earners, payroll tax rules, or other policy levers.

Most experts expect Congress to structure reforms carefully to minimize disruptions for those most dependent on benefits, particularly current retirees. But it is unrealistic to assume only younger workers will feel the effects. Any big fix is likely to be shared.

Myth #3: “Congress has no options.”

While Social Security’s funding gap is significant, there is no shortage of viable solutions. Lawmakers could make incremental adjustments, larger structural reforms, or a combination of both. Options include increasing the taxable wage cap, adjusting benefits for higher earners, modifying full retirement age, changing cost-of-living calculations, or revising how benefits are taxed.

None of these choices are easy, but even small changes can make a meaningful impact. In 1983 — the last time Social Security faced major shortfalls — Congress passed bipartisan reforms that helped stabilize the system for decades. There is precedent for taking action, even if the path is complicated.

Myth #4: “You should claim benefits as soon as you can.”

Some people choose to start benefits early out of fear the program might disappear. Unfortunately, this often leads to choices that reduce lifetime income. Claiming early permanently lowers the benefit you receive each month, and that reduction can affect your financial stability over decades.

Delaying benefits, when possible, increases the monthly amount and may offer additional protection against longevity risk — especially for a surviving spouse. Emotion-driven decisions may provide temporary reassurance but can undermine long-term planning. Claiming should be based on personal circumstances, not fear.

Myth #5: “There’s nothing you can do to prepare.”

This is perhaps the most limiting belief of all. While you cannot control how Congress acts, you can control how you plan. Coordinating Social Security with the rest of your retirement income, using Roth accounts, managing withdrawals from pre-tax savings, planning for Medicare costs, and considering required minimum distributions all play a role in shaping your income over time.

Thoughtful planning, particularly in the years just before or just after retirement, can help maximize the benefits you receive and minimize how much you lose to taxes. Even with uncertainty ahead, proactive decisions can improve long-term outcomes.

Looking Ahead

Social Security isn’t vanishing, and the outlook is not as dire as frequent headlines suggest. The program faces challenges — but it also has multiple paths to stability. Lawmakers have successfully acted in the past, and they have tools to act again.

Your decisions still matter. How you claim benefits, how you draw from savings, how you plan for taxes, and how you coordinate retirement income can all influence your financial outcome. Two people with the same Social Security benefit may have very different retirement experiences simply because of how they plan.

Understanding what’s real and what’s noise is the first step toward building confidence. If you’d like help reviewing your Social Security strategy and how it fits into your broader retirement plan, I’d be glad to talk through your options.

Disclosure

This material is provided for informational and educational purposes only. It is not intended to be, and should not be interpreted as, specific investment, tax, or financial advice. Investing involves risk, including the potential loss of principal. Individuals should consult with a qualified financial professional before making any investment decisions to determine what may be appropriate for their personal situation.