Empower Blog

older woman working at home on laptop
October 20, 2021

5 Myths About Social Security

Financial Planning
You’ve worked hard and want to know you're doing everything you can to reach a fulfilling retirement. Still, with so many people talking about the complex Social Security system, it can be hard to differentiate what is true from what isn’t.

Keep reading to find out the most common misconceptions about Social Security to help you make the best-informed decisions.

1. Myth: Social Security Will Deplete

Although experts foresee Social Security depleting by 2034, it's important to understand this within the proper context.

Keep in mind Social Security is a pay-as-you-go system, so it won't run out if workers and employees continue to pay taxes, though it could eventually lead to some tough decisions. Congress can do things now to prevent future depletion (they've done this before), such as reducing benefits or increasing taxes. These kinds of options may only allow for a certain percentage of your Social Security benefits to be paid out, so it’s worth meeting with a financial advisor to reassess your retirement plan.

2. Myth: You Should Claim Social Security as Soon as Possible

The earlier you begin taking benefits, the lower monthly payments you’ll receive. For example, if your Full Retirement Age (FRA) is 67, and you start collecting at 62 (when you're legally allowed to do so), your benefits would be reduced by a certain percentage. The percentage is determined by the number of months you took benefits before you reached your FRA.

However, waiting doesn't necessarily mean you'll receive more benefits – it varies depending on individual personal circumstances, so talking to your financial advisor is essential to understanding your specific situation.

3. Myth: Social Security Replaces Your Income

Social Security is only a portion of your financial plan. Though it can supplement your income during retirement, it doesn't often replace your full income from working – it usually covers about 33% of what you'll need.

It's essential to consider the type of lifestyle you'll want during retirement. How many vacations do you want to take? What hobbies do you find fulfilling? What does your living space need? To have a fulfilling retirement, determine how much income you’ll need in addition to Social Security income, which could include withdrawals from your savings or retirement accounts.

4. Myth: You’ll Lose Benefits if You Earn Money After Retiring

For many different reasons and to achieve certain goals, some retirees still work after retirement, and that's okay.

If you choose to continue working and elect to receive benefits before your FRA, or during the year you reach your FRA, then your Social Security benefits could be reduced if you earn more than the earnings limit for the year. However, if you have reached your FRA, you can earn as much as you want while continuing to work, and your benefits will not be reduced.

5. Myth: Social Security Can’t Be Taxed

For many Americans, Social Security benefits are taxed. In fact, the federal government may tax up to 50-85% of benefits depending on your income and filing status. Your retirement plan is as unique as you are. If you have questions about the process or want to know how to make the most of your retirement savings and potential Social Security benefits, get in touch with one of our Wealth Advisors.
Was This Article Helpful?
9 of 9 people found this article helpful
About the Author
Professional Photo of Heath Burch
Heath Burch

Wealth Management By CommunityAmerica

Heath is a Private Wealth Advisor who currently sits as President of the Board of Directors for the Liberty Education Foundation, and previously served as President of the Board for Variety Children’s Charity of Kansas City. He also co-founded the Special Needs Planning Center.

Securities and advisory services offered through Copper Financial Network, LLC (“Copper Financial”), a broker-dealer and SEC registered investment adviser. Member FINRA/SIPC. Copper Financial is a wholly-owned subsidiary of CommunityAmerica Credit Union (“CommunityAmerica”) and makes non-deposit investment products and services available to its members. Representatives are registered with Copper Financial. CommunityAmerica and Wealth Management by CommunityAmerica are not broker-dealers or investment advisers. For important disclosures from Copper Financial please visit here.


Copper Financial registered representatives associated with this website may discuss and/or transact business only with residents of the states in which they are properly registered or licensed.


Link to the Copper Financial Customer Relationship Summary.


Investment and insurance products offered through Copper Financial:


Are Not Deposits

Are Not NCUA or otherwise Federally Insured

Are Not Obligations of or Guaranteed by the Credit Union

May Lose Value