By Mike Batista, AARP Montana
For most of us, Social Security is—or will be—essential for helping to cover daily living expenses and pay bills as we get older. The bottom line is that Social Security is your money, earned through a lifetime of hard work. Yet there are persistent misconceptions about its long-term financial stability and how it works. Here are the facts behind three of the most stubborn Social Security myths.
Myth #1
Social Security is going broke. The facts: Social Security will not run out of money, as long as workers and employers continue to pay payroll taxes. It’s a pay-as-you-go system: Revenue coming in from payroll taxes largely covers the payments going out.
But Social Security does face longer-term funding challenges. For decades it collected more than it paid out, building a surplus that stood at $2.83 trillion at the end of 2022. 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 is living longer.
Without changes in how Social Security is financed, the surplus is projected to run out in 2034, according to the latest annual report from the program’s trustees. Even then, Social Security will still be able to pay benefits from incoming payroll tax revenue. But it will only be enough to pay about 80% of scheduled benefits, according to the latest estimate.
If Congress doesn’t take action in the next 10 years to protect and save Social Security, your Social Security could be cut by 20%—an average of $4,000 a year. The last time Congress took major action to shore up Social Security’s nearly depleted reserves was 1983.
Myth #2
Members of Congress don’t pay into Social Security. The facts: Actually, they do. A common complaint about Social Security is that members of Congress don’t bother fixing it because it doesn’t cover them. Members of Congress came under the Social Security umbrella in 1984, along with the rest of the federal workforce, as part of sweeping changes to the program.
Myth #3
You get more Social Security benefits if you collect early. The facts: Your annual payments will be larger the longer you wait to start collecting your benefits. You can begin receiving retirement benefits at age 62, but it will cost you. Say you were born in 1960. If you claim Social Security at age 62, you’ll get 70% of the benefit amount calculated from your lifetime earnings. If you wait until full retirement age—in this case, 67—you’ll get 100%. If you delay taking your benefit past the full retirement age of 67, Social Security increases your benefit 8% a year until you hit 70. There’s no financial incentive to delay past age 70. MSN
Mike Batista leads the advocacy efforts for AARP Montana.
About AARP Montana: For over 50 years, AARP has been working right here in big sky country to improve the lives of Montanans 50 plus. As one of Montanan’s largest non-profit membership organizations, with more than 134,000 members, we advocate for what matters most to families: personal fulfillment, health security and financial stability.
We’re committed to helping already great communities across Montana become even better places for people of all ages by granting funds through our Community Challenge Grant Program. We fund small dollar, big impact projects for public parks & trails, transportation, safe streets, housing and more. We also connect Montanans with information and resources as well as help people connect with others who share their interests and passions – like music! As a main sponsor of the Helena Symphony’s Masterworks Series, we’re proud to help bring quality concerts to the community.
By fighting on issues that matter most to Montana families and providing trusted information, we’re helping to empower Montanans to choose how they live as they age. As a nonpartisan organization, AARP does not endorse candidates for public office or make contributions to candidates, campaigns, or political action committees. Visit us at aarp.org/MT or follow @AARPMontana on social media.
