The People's Blog by Betz and Baril


Fact or Fiction with Social Security

Posted by Jason Baril | Apr 19, 2021 | 0 Comments

Common Misconceptions about Social Security

The Social Security Administration (SSA) plays a big role in supporting the financial well-being of seniors in America. Every year, it pulls more than 15 million retired workers out of poverty and is responsible for helping nearly 9 out 10 seniors make ends meet during retirement and helps millions of disabled Americans receive a small amount of money to try and get by with.

However, it's also a program that's largely misunderstood. Myths and misconceptions abound regarding the financial health of Social Security and what the future might hold for the program. Below, you'll find five of the most pervasive lies you've been told about Social Security, some of which you might even believe are true. I am going to make five statements then we will go back and see what was and what was not true.


1. Social Security will be bankrupt in next 10 years

2. Undocumented workers have ruined this once great robust program.

3. Everyone gets denied Social Security Disability Insurance (SSDI) then some judge pays them a year later

4.Social Security is a Ponzi Scheme.

5. Whatever you pay in to Social Security you get back.


We will have the answers below, after we digress for a few minutes. Thinking back at almost every job I have had there have been myths, falsehoods or fables that become part of the culture. Sometimes these fables were used to play a trick on the new employees with such things as:

A bag boy shaking all the Wishbone Salad dressings to have them ready for the customers in the morning.

A new waiter draining the hot water that will never drain because it is hooked up to a tank of hot water.

Working as a bellman in Panama City and the guests ask things such as my room number is 813 what floor is that on or even better if we have a beach all day. Well that was a fun trip down memory lane but back to the present.

Answers to Fact or Fiction

Lets start with number 1 and the answer is fiction.

One of the longest-running lies about Social Security is that the program is broke. This belief is fueled by the annually released report from the Social Security Board of Trustees that examines the short-term (10-year) and long-term (75-year) outlook for the program.

In the most recent report, the Trustees estimate that Social Security's $2.9 trillion in asset reserves (i.e., its net cash surpluses built up since inception) will be completely exhausted by 2035. Further, the Trustees foresee about 17 trillion in obligations between 2035 and 2094.

The assumption is that if Social Security's asset reserves are depleted, the program will go bankrupt, and no one will receive benefits any longer. This is false.


Moving on to number 2. This is false as well undocumented immigrants are not ruining Social Security.

A pervasive lie regarding the Social Security program is that its financial struggles can be tied to immigration -- more specifically, undocumented migrants receiving benefits. The thinking here is that if Social Security benefits weren't paid to undocumented immigrants, the program would be on better financial footing. However, there are two things you absolutely need to know about this mode of thinking -- other than the fact that it is not founded in logic.

Social Security relies on legal net immigration workers every year to help offset the number of workers retiring. Migrants into the U.S. tend to be younger, which means they're likely to spend decades in the labor force contributing to Social Security via the payroll tax and paying other taxes. 

Second, undocumented workers aren't eligible for a traditional Social Security benefit or disability benefits. Since they don't have a Social Security number and have no legal pathway to citizenship, undocumented workers do not have any work credits. They have not worked 5 out of 10 years for SSDI even if they have worked all 10 years because they have not paid into the system.

Number 3 is false as well.

First 20% of people win on the initial application and hiring a lawyer can raise that further. Next less than fifty percent of cases heard by Administrative Law Judges are paid. 

Number 4 is false too.

A fourth lie you've probably heard about Social Security is that it's one giant Ponzi scheme. A Ponzi is a fraudulent plan promoting high rates of return and minimal risk to drive investment. Persons running a Ponzi scheme will pay off early investors with the money being provided by newer investors, giving the impression of a successful venture with big returns.

In essence there is a constant robbing Peter to pay Paul problem going on with Ponzi schemes.

Social Security is very efficient. Just $6.42 billion of the $1.06 trillion collected in 2019 was spent on running the program. This means 99.4% of all money collected will be disbursed as a benefit.

Last one number 5 and it is false as well. Social Security numbers are not you paid exactly so you get exactly this amount 

According to an analysis by the Urban Institute in 2018, a low-income single man (low income is defined as $23,400 in 2018 dollars) who turns 65 in 2020 will have paid an estimated $135,000 in lifetime Social Security payroll tax but  By comparison, a single man with maximum taxable net 193k in lifetime earnings of $127,200 (again, in 2018 dollars) who'll turn 65 in 2020 will have paid $710,000 in lifetime Social Security benefits but can only expect to receive $512,000 in lifetime benefits.

He loses out on about 200k. What you pay in isn't what you receive back from the program. 

Additionally, the dollar you pay into the program via payroll taxes isn't necessarily the dollar you get in return. Keep in mind that 11% of the$1.06 trillion Social Security generated last year came from the interest earned on its asset reserves and from the taxation of Social Security benefits.

Already applied or thinking of applying contact Betz and Bariland we will fight relentlessly to get you all the benefits you deserve and more.


About the Author

Jason Baril

Jason has spent his entire career fight for those who need help and often times do not get the help they need. In addition to Immigration Law, Jason has worked on Criminal, Social Security Disability and Personal Injury cases which gives him diverse experience on many legal issues. 


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