Busting Social Security Misconceptions With TSCL
The Senior Citizens League (TSCL) on Wednesday hosted a webinar on misconceptions surrounding Social Security’s incoming insolvency, the cost-of-living adjustment (COLA) formula, and other points impacting the federal program.
The event, hosted by TSCL’s Executive Director Shannon Benton and Social Security and Medicare statistician Alex Moore, busted common myths associated with Social Security. Among these misconceptions are the idea that younger workers will not receive Social Security benefits, and the impression that COLA numbers are keeping up with daily inflation figures.
While the future of the program may look different, given reports that benefits could be cut by as much as 23% by 2032, Benton noted that payments will still be available to younger workers. “As long as they take money out of your paycheck, it’s going to be there. As long as we’re paying into it, there will be some kind of program,” said Benton during the event.
Moore explained that because Social Security is a “pay as you go” system that relies on workers to fund current retirees’ benefits, the system may change as the U.S. birth rate falls. A report by the CDC found that the U.S. fertility rate fell to record lows in 2024, while a study by the Pew Research Center reported that Americans in their 20s and 30s expect to have fewer children than they would a decade ago.
Moore added that while the U.S. previously had 16 workers for every retiree when the program began, today, that number has drastically fallen to 2.5 workers per retiree.
“In the future, the generation that comes after me will fund my benefits and so on. That works well when you have a lot of people working for every retirement person,” Moore said. “Population stagnation is a real challenge.”
Longevity, and the fact that retirees are living in retirement for longer periods of time, is an added layer to Social Security’s insolvency. Another CDC report found that life expectancy at birth for the U.S. population increased to 79.0 years in 2024, and the average 65-year-old will live to age 85.
As seniors live longer, Moore questioned whether congressional actions like raising the full retirement age (FRA) to collect Social Security benefits would save some of the fund’s reserves. Currently, the full retirement age sits at 67.
Another solution includes raising payroll taxes incrementally over the next five to 10 years, Benton raised. “It wouldn’t be felt at all, but it would be enough to increase the insolvency by a substantial amount,” she said.
COLA (not) keeping pace with inflation
Moore and Alex both observed how cost of living adjustments have not kept up with current rates of inflation. Standing at a current estimate of 2.8% for 2027, the Social Security COLA has not kept pace with CPI-W increases over the last 12 months. Further, TSCL projected a 13.7% loss of buying power from 2016 to 2026 due to weak COLA figures.
While the White House has maintained that Social Security benefits are on par with inflation numbers, Benton contends that real-life seniors would disagree. “If you go to the grocery store, you’re going to see that is absolutely not true. They’re not looking at the spending habits of seniors,” she said. “We at the Senior Citizens League don’t believe that the Social Security COLA is keeping up with inflation.”
Amanda Umpierrez is the Managing Editor of 401(k) Specialist magazine. She is a financial services reporter with nearly a decade of experience and a passion for telling stories and reporting news.