Social Security plays a central role in retirement, yet misconceptions about how it works remain widespread. These myths can lead to confusion, unnecessary worry or poor planning decisions. Let’s debunk a few of the most common myths surrounding Social Security.
Myth #1: Social Security is going broke
The facts: The concern that Social Security is going bankrupt continues to resurface, but we don’t believe the system is going bankrupt. While Social Security faces pressures, the reality is more nuanced.
According to the 2025 Social Security Board of Trustees Report, if no changes are made, Social Security would need to reduce benefits starting in 2033, paying approximately 77 cents for each dollar of projected benefits — an across-the-board cut of 23%. However, this represents only one potential scenario.
Congress could raise the combined payroll tax from 12.4% to 16.05%, which would secure full benefits through 2099 based on estimates by the Social Security Board of Trustees. Other options include eliminating the cap on earnings subject to payroll tax or adjusting retirement ages. These are just a few of the many remedies Congress has explored to help put the program on more stable footing.
Myth #2: Social Security will cover all your retirement needs
The facts: Think of Social Security as a financial foundation, not the full building. According to the Social Security Administration, benefits replace only about 40% of pre-retirement income for a median earner — meaning you’ll likely need to account for the bulk of your retirement income yourself.
Social Security was never designed to be your sole income source; it’s meant to supplement your pensions, annuities and investment portfolio. Building a robust personal savings strategy today can help make up the difference of what Social Security provides and what your retirement requires.
Myth #3: You lose benefits permanently if you keep working
The facts: Social Security does have a rule called the “earnings limit” or “earnings test” that can temporarily reduce the benefits of people who still work. But it doesn’t apply to all working beneficiaries and is not permanent.
The rule only covers people who claim benefits before their full retirement age and choose to continue working. Social Security withholds a portion of benefits if earnings from work exceed a set cap, which changes every year and differs depending on how close you are to full retirement age. After you reach your full retirement age, the Social Security Administration adjusts your benefit check higher to pay back those withheld benefits over time.
Myth #4: An ex-spouse’s benefits come out of your own
The facts: If you’re divorced, your former spouse may be eligible to collect Social Security benefits on your earnings record, or you may be able to collect on theirs. To be eligible for divorced spousal benefits, you and your ex-spouse must have been married for at least 10 years and currently be unmarried. Just like benefits for a current spouse, divorced spouse benefits can be up to 50% of your retirement benefit at full retirement age. However, that amount is offset by their own benefit, so if that’s already more than half of your benefit, they won’t receive an added benefit.
But those ex-spouse (or spouse) benefits don’t reduce your benefits. They are distinct payments and have no effect on your monthly benefit, even if both a current and a former spouse are collecting them. You get the benefit you’re entitled to, based on your earnings history and the age when you file for Social Security.
Myth #5: Social Security benefits are no longer taxed
The facts: The One Big Beautiful Bill Act didn’t eliminate taxes on Social Security benefits. If your combined income exceeds certain thresholds, you’ll still owe taxes on part of your benefits.
The good news: The new law created a temporary deduction — available through 2028 — for people 65 and older. Whether you’re an itemizer or nonitemizer, you can deduct $6,000 per qualifying taxpayer if your modified adjusted gross income (MAGI) is $75,000 or less for singles ($150,000 for couples). The deduction phases down for those with MAGI above these thresholds and fully phases out at $175,000 for single filers ($250,000 for joint filers). This deduction is on top of the additional standard deduction for taxpayers over the age of 65 that existed before the One Big Beautiful Bill Act.
How Edward Jones can help
Planning for retirement is too important to let myths steer your decisions. To help make sure your plan fits your goals, income and timeline, reach out to your financial advisor for personalized guidance.