Clearing Up Three Common Social Security Misconceptions
Social Security can seem complicated. Because millions of older Americans rely on this critical program for their retirement income, Moneywise took the time to clear up a few common misconceptions.
Social Security will replace your paycheck. Social Security is not meant to sustain you through retirement, it is only a supplement to other retirement income. Social Security benefits are typically about 40 percent of what you earned while working.
Social Security benefits are not taxed. Social Security benefits are considered income and can be taxed by the federal government depending on how much money you make.
Social Security will run out of funds before you retire. Social Security is facing a funding shortfall. According to the article, “current projections show Social Security fully funded through 2034 and potentially reduced to 80 percent after that in part because life expectancies are much higher than when the program was first introduced in 1935. If Congress steps in between now and 2034, future legislation and policy changes could affect what’s available for retirees.”
The Seniors Trust strongly believes the only way to ensure solvency is passage of the Social Security Expansion Act. This landmark bill will increase monthly benefits by $200, create a better cost-of-living adjustment (COLA) calculator that takes into account the expenses impacting seniors the most, and buttress the long-term solvency of Social Security.
