Most people appreciate hearing the truth. However, rumors and myths can be kind of fun. It’s only when a person can’t tell the difference between a myth and reality that a problem arises. Since 1935 — when Social Security was first introduced — stories about the program have swirled.
And now that Social Security’s Old-Age and Survivors Insurance Trust Fund is projected to be depleted by 2033, some myths have gained steam. Here, we look at five of the whoppers and examine the truth behind them.
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Myth 1: President Franklin D. Roosevelt promised that participation in Social Security would be completely voluntary
Anyone who works in a job covered by Social Security is subject to the FICA payroll tax, and, like all taxes, it’s never been voluntary. From day one, workers have been obligated to pay into Social Security.
Myth 2: Roosevelt promised that any money workers put into the Social Security program would be deductible from their income tax
The reality is that there was never any provision allowing employees to deduct their Social Security taxes. In fact, a 1935 law expressly forbade the idea.
Myth 3: Roosevelt promised that Social Security payments would never be taxed as ordinary income
When it first started, Social Security benefits were not taxed. However, it wasn’t something the president ever promised (or could have promised), and there was never a law barring the taxation of Social Security benefits in retirement.
That said, it wasn’t until 1983 — the last time the trust fund was about to run out of funds — when Congress authorized the taxation of benefits.
Myth 4: Politicians have raided Social Security to pay for other expenses
Social Security funds can only be invested in special U.S. Treasury securities. While the government does borrow from Social Security by issuing these bonds, it pays them back with interest. In much the same way a bank uses your deposits, this is lending rather than looting.
Myth 5: Undocumented immigrants are responsible for draining Social Security
The reality is that this myth gets it backward. While undocumented workers often use false Social Security numbers to get a job and pay into the system through payroll taxes, they can never collect benefits. According to the American Immigration Council, undocumented workers contributed $26.2 billion to the Social Security Trust Fund in 2023, just one part of the estimated $89.8 billion they paid in combined federal, state, and local taxes.
Whether a person holds onto a myth because it’s fun, interesting, or simply fits their worldview, the truth is the truth. Believing otherwise does nothing to change that fact.
