24/7 Wall St. Key Points:

• Many Baby Boomers mistakenly think Social Security won’t be there for them.
• Almost half of Baby Boomers expect Social Security to be a primary income source when that may not be possible.
• Not knowing the truth about Social Security could lead to poor choices that affect retirement security.
• Also: Take this quiz to see if you’re on track to retire (Sponsored)

As Baby Boomers age into retirement, many are already collecting Social Security and others soon will be.  Unfortunately, members of this generation have bought into some myths about this retirement benefits program and their misconceptions could impact their future financial security.

Here are two big things Boomers are getting very wrong, along with some insight into why their errors matter when it comes to preparing for their later years.

1. Most think Social Security won’t be there for them in retirement

According to the TransAmerica Center for Retirement Research, 61% of Baby Boomers are concerned that Social Security will not be there for them when it comes time for retirement.  This misguided belief is based on concerns about the program’s trust fund, which is in fact expected to run short of funds as soon as 2035.

However, this doesn’t mean what most people expect. If the trust fund runs out, Social Security could still pay around 83% of promised benefits so seniors would get the vast majority of their money. The program can’t run out of money based on its current funding streams, as it can pay benefits out of taxes being collected from current workers. With the popularity of Social Security and even Republicans now pledging to protect it, it’s unlikely that even these cuts will happen without lawmakers intervening.

Now, this misconception isn’t a problem — and could actually be a good thing — if it prompted Boomers to save more. However, it becomes a big issue if seniors claim benefits earlier than they otherwise would have because they want to start gaining access to their funds before they “run out.”

Starting benefits ahead of schedule can shrink them thanks to early filing penalties and missing out on delayed retirement credits that become available for those who wait longer. So, the 61% of retirees who think Social Security is going to run out risk making choices that could actually leave them facing the very type of benefit cuts they’re so worried about.

2. Almost half of all Boomers think Social Security does more to support them than intended

Although Boomers are too pessimistic about Social Security’s long-term future, they’re also too optimistic about what the program can do for them right now. Specifically, Transamerica’s research found almost half — 43% — expect Social Security to be their primary income source in retirement.

The big problem with this belief is that Social Security replaces around 40% of pre-retirement income and replaces even less for those who are higher earners. Unless you plan to live on less than 80% of what you earned at work, which can be a difficult thing to do, Social Security can’t be your primary income source.

Many people need 90%, or even 100% or more of what they were making on the job to cover healthcare and other big expenses in their later years — especially if they retire with a mortgage, student loans, or other debt to their name. Supplementary funds need to come from somewhere to help them be comfortable because Social Security alone just won’t cut it without some pretty harsh lifestyle changes.

Baby boomers must be realistic about Social Security

Social Security is undoubtedly an important income source in retirement, even if it can’t and shouldn’t be a primary income source. Since it will provide Boomers with tens of thousands in income, members of this generation should take the time to learn the truth about it so they can make informed choices.

A financial advisor can provide tips on claiming age and insight into how much extra income to have before retiring, so Boomers can make smart decisions to help them live comfortably in their later years.

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