AARP: Social Security Won’t Run Dry

Is Social Security going broke?  That’s one of several myths out there about Social Security.  The AARP’s Sean Voskuhl said nothing could be further from the truth.

“Social Security will not run out of money, as long as workers and employers continue to pay payroll taxes," he said.  "It’s a pay-as-you-go system, but it does have challenges. If Congress does nothing by 2034, Social Security will only be able to pay 80% of its promised benefits, which would amount to about a $4,000 a year cut for most recipients.  That’s why AARP is working to keep Social Security strong for current and future generations.”

There’s another myth that members of Congress don’t pay into Social Security.  The fact is, they’ve paid into Social Security since 1984.  Voskuhl said another myth is you’ll get more Social Security benefits if you collect early.

“The reality is your annual payments will be larger the longer you wait to start collecting benefits," Voskuhl said.  "You can begin receiving retirement benefits at 62 but at a reduced rate. If you wait even longer, your benefits increase by eight percent a year until you hit 70.”

Another myth he pointed out is that you loose a portion of your benefits permanently if you take benefits and keep working.  Again, that’s not true.

“Social Security does have an earnings limit rule or earnings test that can temporarily reduce your payments if you are still working. But it doesn’t apply to all working beneficiaries, and it’s not permanent. The rule only covers people who claim benefits before full retirement age and keep working,” he added.

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