Did your parents ever tell you not to believe everything you hear? When it comes to Social Security, there’s an endless supply of rumors. Many of these myths came to life decades ago. With the amount of misinformation in the media and social media, it’s understandable how these myths persist today.


Myth #1: Your Social Security payout is based on the average of your 10 highest-paid years of working. 

Wouldn’t that be great if this statement were true? Your monthly Social Security check amount is based on the average of 35 years of your annual salaries after age 21. If you worked for fewer than 35 years, those years will be counted as a salary of 0. To receive the highest Social Security check possible, you must work a minimum of 35 years over the employment phase of your life.


Myth #2: Congressmen don’t contribute to the Social Security system. 

This myth continues to persist because this was true until 1984. Before that, members of Congress paid into a separate program that was established for civil servants. But in 1984, Congressmen began paying into the Social Security system just like you and me.


Myth #3: Social Security is going bankrupt. 

At some point, a myth was created that suggested that Social Security was doomed to fail. While it’s true that Social Security is feeling financial pressure due to the high number of Baby Boomers that are claiming benefits, the system isn’t going to cease to exist. 


There are two parts to Social Security. Old-Age and Survivors Insurance (OASI), which is the fund that pays monthly benefits to retirees, families, and survivors. The second piece is Disability Insurance, which pays benefits to disabled workers. (1)


According to a 2022 Social Security Trustees report, it’s projected that retirees may begin receiving reduced Social Security benefits if Congress doesn’t make some funding changes by 2034. At that point, Social Security will exist, but retirees may only receive 77% of their full benefits going forward. (2)


When it comes to Social Security, as long as American citizens are employed and paying taxes, benefits will be available, although it may be at a reduced rate. (2)


Myth #4: If you take Social Security, you are guaranteed a COLA every year.

Since 1975, Cost of Living Adjustments (COLA) has been automatically adjusted to Social Security benefits. Before then, Congress would have to vote on increasing the benefits recipients would receive, which resulted in years passing by with zero cost of living increases. That being said, COLAs are unnecessary and do not happen yearly (2010, 2011, and 2016 saw no COLA increase). (3)


Myth #5: Social Security benefits are not taxed. 

This myth is true for some people, but not for all of them. If you file your Federal tax return as an individual with more than $25,000 combined income or a joint return with a combined income of $32,000 or more, you will pay taxes of up to 85% on your Social Security benefits. Likewise, if you are married and file a separate return, you will also pay taxes on your Social Security benefits. (4)


Myth #6: If your ex-spouse files on your Social Security benefits, your monthly benefit will be reduced.

While your former spouse may be able to claim Social Security benefits on your earnings record, if the marriage lasted for a minimum of 10 years and they have not remarried, it will not affect your benefit whatsoever. There will not be any reduction in your Social Security checks, even if you were married multiple times and all of them are claiming benefits on your earnings record.


An important word in retirement planning is “income,” and Social Security is a critical pillar of retired income.  If you earned a modest income during your working years, you have probably contributed thousands of dollars to Social Security. This is why it’s crucial to help to ensure you get it back by maximizing your benefit. To find out the best (and worst) time to begin taking your Social Security, schedule an appointment with the Advisors of Osiwala Financial Group by clicking HERE.


1.  https://www.investopedia.com/terms/o/old-age-and-survivors-insurance-trust fund.asp#:~:text=Yes%2C%20OASI%20is%20the%20same,pays%20benefits%20to%20disabled%20workers.
2.   https://www.cnbc.com/select/will-social-security-run-out-heres-what-you-need-to-know/
3.  https://www.aarp.org/retirement/social-security/info-2020/colas-history.html#:~:text=The%20first%20two%20decades%20of,2010%2C%202011%20and%202016).
4.  https://faq.ssa.gov/en-us/Topic/article/KA-02471#:~:text=You%20must%20pay%20taxes%20on,income%E2%80%9D%20of%20more%20than%20%2432%2C000.