Three common Social Security myths in 2025

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By Katherine Tierney
Posted on September 09, 2025

Social Security plays an important role in retirement for most Americans. Here’s what you need to know about three common Social Security myths today:

Myth No. 1: Social Security is going bankrupt

Based on current projections, Social Security isn’t going bankrupt. According to the 2025 Social Security Trustees Report, if no changes are made to the program, it will need to reduce benefits in 2033, paying about 77 cents per dollar of the projected benefit.

However, there are several changes Congress can make to strengthen the program and avoid these future cuts, such as removing the earnings ceiling for Social Security payroll taxes, increasing the payroll tax rate or raising the age for eligibility or full retirement.

For example, the Board of Trustees estimates that raising the combined payroll tax from 12.4% to 16.05% would fully fund the program through at least 2099.

What you can do: To navigate the uncertainty, focus on what you can control — how much you save for retirement and when you claim your benefit.

How much to save: According to a June 2025 analysis from the Social Security Administration, Social Security replaces about 40% of pre-retirement income for a median earner who claims at full retirement age (FRA) and who makes an average of $69,473 a year.

The more you earn, the more you’ll have to replace with your own savings to maintain your lifestyle in retirement. Use a financial calculator or work with a financial adviser to help ensure you’re saving enough to meet your needs.

When to claim: While there might be reasons to claim early, we generally recommend against taking benefits before your FRA based on worries about the program’s health.

Social Security payments can be sharply and permanently reduced by as much as 30% if taken before FRA. This initial reduction also compounds over time, since cost-of-living adjustments are based on this amount, but retirement could last 25 years or longer.

Additionally, your selections don’t just impact you; they could permanently affect the benefit for your surviving spouse.

Myth No. 2: Layoffs and budget cuts will cause benefits to be delayed or reduced

Budget cuts and staffing reductions won’t reduce your benefit amount. Any changes to how Social Security benefits are calculated would require congressional approval.

While service quality could be impacted, we believe widespread delays in benefit checks are unlikely because of the political pressure the government would face.

However, wait times to talk to a representative and file benefits could continue to increase.

What you can do: When you’re ready to file, consider the following:

Start the application process up to four months ahead of your desired start date
Use online resources and tools when possible

Myth No. 3: Taxes on Social Security benefits have been eliminated

Contrary to some reports, the One Big Beautiful Bill (OBBB) didn’t eliminate taxes on Social Security benefits, though a new deduction could have an impact (more on that below).

If your combined income is above a certain threshold, a portion of your benefits will be subject to taxes. Your combined income is equal to the sum of your adjusted gross income (AGI), nontaxable interest and half your annual Social Security benefit.

If your combined income is from $25,000 to $34,000 for single filers ($32,000 and $44,000 for joint filers), up to 50% of your benefit is taxed.

If it’s greater than $34,000 for single filers ($44,000 for joint filers), up to 85% of your benefit is taxed.

While the OBBB didn’t eliminate taxes on benefits, it did include a new temporary deduction for eligible individuals age 65 or older that can help offset taxes on benefits.

To qualify for the full $6,000 deduction (per taxpayer), your modified adjusted gross income must be $75,000 or less for single filers ($150,000 or less for joint filers). It phases down for income above these thresholds and fully phases out at $175,000 for single filers ($250,000 for joint filers).

The deduction is available through 2028, and it’s in addition to the current standard deduction available to older people.

What you can do: You might be able to further reduce taxes by using some tax-free assets, such as qualified Roth accounts and health savings account (HSA) withdrawals, as these assets don’t count toward your combined income.

Make sure you’re withholding an appropriate amount from your monthly Social Security checks to avoid a surprise at tax time. You can file IRS Form W-4V to update your withholdings.

Katherine Tierney, CFA®, CFP®, is a senior strategist at Edward Jones. This content is provided for educational purposes only and should not be interpreted as specific investment, tax, or legal advice. Edward Jones, its employees, and financial advisors cannot provide tax or legal advice. Consult your attorney or qualified tax advisor regarding your situation. Opinions stated are not intended to predict or guarantee the future of Social Security.