3 Social Security Myths That Could Ruin Your Retirement 

Hundreds of misleading posts about Social Security circulate daily on social media platforms, often shared by well-meaning individuals but without financial expertise.

These myths, if believed, can lead to costly mistakes in retirement planning. While peer opinions may be tempting, accurate information should come from the Social Security Administration (SSA), the Internal Revenue Service (IRS), or a certified financial advisor.

Social Security Can Be Taxed

One widespread misconception is that Social Security benefits are never taxed. In reality, many recipients do pay taxes on a portion of their benefits. According to the IRS, whether your benefits are taxable depends on your own income and filing status. For example, single filers with a combined income of $25,000 to $34,000 may owe taxes on up to 50% of their benefits. The percentage can climb to 85% for higher income levels.

This applies to joint filers as well, and those living in certain states—including Colorado, New Mexico, and Vermont—should also consider potential state-level taxation. The IRS provides worksheets and calculators to help estimate your specific tax exposure.

You Don’t Have to Be Retired to Collect

Another persistent myth is that only retirees can collect Social Security. In reality, individuals can start receiving benefits before reaching full retirement age (FRA), which ranges from 66 to 67, depending on the individuals birth year.

However, collecting early comes with limitations. In 2025, those under FRA earning more than $23,400 annually may see a portion of their benefits withheld. Specifically, $1 is deducted for every $2 earned above the limit. For those reaching FRA during the year, the earnings threshold increases to $62,160, with a $1 reduction for every $3 earned over that amount. Once full retirement age is reached, these earnings limits disappear, but tax obligations may remain.

COLAs Aren’t Guaranteed

The third myth relates to cost-of-living adjustments (COLAs), with many assuming they are automatic each year. The SSA ties COLAs to inflation, using the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). While most years see an increase—2025 will offer a 2.5% COLA—there’s no guarantee.

In years where inflation is stagnant or negative, no COLA is issued. In recent years, such as 2009, 2010, and 2015, there was no increase at all. Furthermore, even when a COLA is applied, it affects the primary insurance amount (PIA), not necessarily resulting in a direct percentage increase to your monthly benefit.

Inaccurate assumptions about Social Security can lead to reduced income, poor tax planning, and unrealistic budgeting. To avoid costly missteps, individuals approaching retirement should rely on official sources and licensed advisors—not viral social media claims—to make informed financial decisions.