Two Big Social Security Misconceptions Explained
There’s a great deal of confusion when it comes to Social Security. To better help you understand the program, Oregon Live pointed out two big misconceptions and explained how the program really works.
#1 Social Security is a retirement fund.
Social Security is not a 401(k) or another retirement fund that you pay into while you’re working and then withdraw from during retirement. Instead, think of Social Security as a form of insurance. Its formal name is Old-Age, Survivors, and Disability Insurance, or OASDI. It’s a pay-as-you-go system where the payroll taxes collected from current workers pay for the benefits received by people who are retired. There is no individual account. All payroll taxes go into the Social Security trust fund.
#2 You can collect survivors benefits after your spouse passes.
The other misconception is that survivors (widows/widowers) qualify for additional benefits on top of their own. Survivors will get the larger of the two benefits a couple was receiving — not both. You cannot double-dip. Widows/widowers often experience a deep income cut after their partner dies.
The Seniors Trust is committed to improving the financial well-being of America’s retirees through passage of The Social Security Expansion Act. It will give retirees an immediate benefits increase of about $200 a month, a fair annual cost-of-living adjustment (COLA), and increased minimum benefits.
