Protect your financial future. Don’t fall for these social security myths
Social Security myths abound. We’re here to help you dispel some fact from fiction when it comes to your financial future. Be sure to stay well informed when it comes to your retirement and the future of your income.
Myth #1 — Social Security is like having a private savings account
Many people envision that the money taken out of their paycheck weekly goes into their own private account. Not so. Your money funnels into a general fund and some other retiree lives off of it right now.
Currently, the Social Security system collects more money than it pays out. But when the baby boomers all begin collecting, it’s time to pay attention.
Myth #2 — Social Security is safe until the year 2042
Social Security sends out statements three months before your birthday every year. On the front of this statement, you will see this:
“Without changes, by 2042 the Social Security Trust Fund will be exhausted. By then, the number of Americans 65 or older is expected to have doubled. There won’t be enough younger people working to pay all of the benefits owed to those who are retiring. At that point, there will be enough money to pay only about 73 cents for each dollar of scheduled benefits.”
This gives people a false sense of “security” that social security is safe until the year 2042. This just isn’t true. With all of the changes in the world and the economic system, the government predictions about how long social security will last are sketchy at best.
Myth #3 — Social Security is already bankrupt
While the future doesn’t look too bright, the system isn’t currently bankrupt. At present, receiving at least 3/4 of the money can be expected.
Myth #4 — Retire solely on your Social Security payment
Consider Social Security as a supplement for your retirement. But by no means plan on having a great retirement solely with Social Security payouts. Save money in addition to social security to ensure you and your loved one’s financially secure futures.
Myth #5 — The Social Security well never runs dry
The baby boomer generation’s impact on Social Security remains a daunting fear. The number of people collecting Social Security doubles, and that same generation gave birth to fewer children. This adds up to more people collecting Social Security than less workers paying into the system.
Create a bright financial future and recognize that these Social Security myths are untrue. Make plans to save money in addition to the government pays you. Create your own retirement fund to fall back on in the event Social Security does not live up to its promise.