AMAC Foundation

Social Security: Legends, Lies, and Misunderstandings

It never ceases to amaze me how some legends and myths grow over time, to the point that they are viewed as true, regardless of how inaccurate they might be.

“Repetition does not transform a lie into a truth”[1]

The old axiom, attributed to several historical figures, that “a lie told often enough becomes the truth” still seems valid in today’s world. President Franklin Delano Roosevelt (FDR) once cautioned that “repetition does not transform a lie into a truth.” And, unfortunately, America’s Social Security program, created by FDR, has fallen victim to many untruths (myths), perpetuated by modern day social media and self-proclaimed “pundits” who only succeed in creating confusion among those who look forward to their “golden years” of retirement.

Then, too, there are honest misunderstandings about Social Security, born out of a program which has become exceedingly complicated, now requiring over 100,000 internet web pages to explain more than 2,700 rules. For these reasons, the AMAC Foundation has sought to assist senior citizens with understanding how Social Security affects them, dispelling the many myths and misunderstandings about the program, including those related to the potential impact of the looming financial issue of solvency the program faces in the early 2030s. To this end, the AMAC Foundation recently participated in a public webinar to discuss the issue of Social Security’s financial woes and highlight AMAC’s proposal to restore the program to fiscal solvency for generations to come.

Educating a Misinformed Public

The webinar aired on November 13, 2025, attended by over 600 people eager to understand how, and if, Social Security would be there for them in the future. The webinar also offered attendees the opportunity to submit questions and comments about Social Security and their concerns, which many attendees did. Some questions focused on the attendee’s personal circumstances and the SS benefits they might be eligible for. However, we were surprised by the level of misunderstanding about how the program works – especially by questions asking who is eligible for Social Security benefits and how the program arrived at the financial issue it now faces. While we deal with questions like this every day at our Social Security Advisory Service, the level of misconception among this relatively small group of webinar participants was astonishing.

As expected, some of the questions submitted focused on the politics surrounding the program, which are not truly about Social Security but rather about what AMAC is doing in Washington, D.C. to fix various legislative issues in the current political environment (these are the purview of “AMAC Action,” which hosted the AMAC webinar). And, as noted, there were a number of specific questions about how Social Security would apply in the attendee’s personal circumstances, usually touching on Cost of Living Adjustments (COLA), spouse benefits, survivor benefits, and when to claim retirement benefits. But the unexpected take-away received loudly and clearly by our AMAC Foundation staff was that deep misunderstandings exist on the topics of illegal aliens collecting benefits, and on the belief that politicians have (over the years) stolen Social Security money for their “pet projects.” Many attendees contended that if that money was repaid, Social Security would not be facing the financial dilemma it now faces. Still others believe that privatizing Social Security by investing SS money in the public financial markets is the answer to Social Security’s financial woes.

Of course, here at the AMAC Foundation we have been waist-deep in Social Security matters for many years, including the various alternative ideas for how the program might work. Some lament that Social Security is “nothing but a Ponzi scheme” and that the reserves in the SS Trust Fund are “worthless IOUs.” But we answered every question relating to Social Security individually, explaining the truth – how the program actually works and dispelling prevailing misconceptions.

Do “illegals” Receive Social Security Benefits?

Here is a sampling of questions submitted during the webinar about illegal aliens collecting Social Security:

Linda C. asked: “Are illegal aliens really getting social security benefits? They have no right to the money that American citizens have paid into all of their adult lives.”
Carra C. asked: “Are non-citizens getting social security benefits? If so, why?”
Jeffery G. asked: “How many are on SS that have never paid in and how many illegals (are) on SS?”

To these and similar questions, we explained that only those who meet Social Security’s definition of “eligible” can obtain benefits. They must have either contributed sufficiently to the program over their lifetime or be the legal dependent (legally present in the U.S.) of an eligible beneficiary. Others who do not meet Social Security’s eligibility criteria, which includes the requirement to be legally present in the United States, cannot collect Social Security benefits. While some U.S. states may provide welfare assistance to non-citizens, Social Security funds are not used for that purpose. Note that the “SSI” program (Supplemental Security Income) for low income and disabled persons is not funded from the Social Security Trust Fund, although many mistake “SSI” benefits as Social Security benefits (which they are not).

Have Politicians Stolen Social Security money?

A lot of questions were raised by webinar attendees asking whether Social Security money has been used (or stolen) by politicians – either Congress or any of the Presidents – to fund pet government projects. Here are samples of questions asked on that at the webinar:

Gloria S. commented: “Congress had been using SS $ to pay their expensive programs. They should pay that back to keep SS alive.”
Emily K. asked: “How can we get Congress to give back the money to the SS fund that they stole from it already?”
Judy J. asked: “Why has Congress been able to borrow from the Social Security Fund? How can we make sure that does not happen anymore?”

We responded to these and many similar questions by explaining that the idea that Congress, or any President, has used, or can use, Social Security money to pay for any other non-SS program is a pervasive myth which we have refuted numerous times over the years. Politicians have always been (and are) prevented by law from doing so. In fact, we have written many articles explaining this, all of which can be found on our websites (www.socialsecurityreport.org and www.amacfoundation.org). Following are links to a couple of the articles we have recently published about this topic:

Myths – Part II: The Social Security Myth that Simply Refuses to Die!

Can/Should Social Security be “Privatized?”

The idea of “privatizing” Social Security has been debated for decades, and the concept is still a topic of popular discussion today, especially in light of Social Security’s looming financial issues. Here are just a few of the many questions about “privatization” received during our recent webinar:

Robert B. asked: “Can we privatize social security? The socialists believe we don’t have “the smarts” to save for ourselves. Let’s prove them wrong by educating our children accordingly.”
Cliff C. suggested: “Interest paid to the “trust fund” currently comes from treasury notes. Can we place the trust fund holdings in privately run funds rather than governmental programs to eliminate this burden on the taxpayers?”
Dan W. asked: “Why do we just not privatize SS?”

To these and many other similar questions on this topic, we explained that the concept of privatizing Social Security has been discussed for many years and has been previously proposed in past Congressional legislative efforts. Perhaps most memorable was President George W. Bush’s 2005 attempt to invest SS payroll taxes into private investment accounts, thus achieving higher returns than available from the government bonds then (and still) used to invest excess SS income. That 2005 effort failed because of strong public resistance, which resulted in a corresponding reluctance by Congressional Representatives to consider privatizing Social Security. That negative sentiment has largely continued in Congress so no serious attempts at privatization have since occurred.

Nevertheless, some pundits still advance the concept of putting SS contributions into private 401(k)-like investment vehicles and giving SS beneficiaries the ability to choose how their contributions are invested. The problem with this approach is that Social Security is not now (and has never been) a program which establishes individual accounts from which future SS benefits are withdrawn. The fact is that most who claim Social Security collect benefits for decades and, under the current program, those benefits continue for as long as one lives. Setting up individual accounts would likely result in the invested money running out before life expectancy is reached by many, thus subjecting more American retirees to future poverty.

About Socials Security’s Trust Fund Reserves

Congress has historically preferred the guaranteed, no risk, current SS policy of investing in U.S. government bonds, versus subjecting SS money to the volatility of the public financial markets (recall the “market crash” of 1929 which obliterated many investments). And although there have been some recent discussions by administration officials about providing a level of privatization of Social Security, no legislation is yet on the horizon.

Currently, Social Security’s excess revenue is held in “special-issue government bonds” which pay interest on the money invested. For bonds issued in 2024, the average interest rate was 4.3%. The average interest rate on the entire portfolio of special-issue bonds contained in the Social Security Trust Fund (about $2.6 trillion) is about 2.5%. But, because SS revenue has been inadequate to pay all benefits since 2020, the reserves in the SS Trust Fund are now being used to supplement benefit payments. Which means the Trust Fund reserves are rapidly being depleted, so program reform is needed soon to avoid an across-the-board cut for every SS beneficiary starting in 2033.

Dispelling Myths, Explaining Solvency, and a Path Forward

The myths surrounding Social Security are many, largely fueled by uninformed “pundits” seeking to develop headlines providing them with readership. Here at the AMAC Foundation, we have very carefully examined all of these legends, lies, and misunderstandings, which we’ve found only serve to confuse the public and detract from the real issue – Social Security is now facing financial difficulties brought on by income dispersion (many earnings exempt from SS taxes), lower birth rates and decreasing ratio of contributors to beneficiaries, and an inexorably growing number of beneficiaries collecting (exacerbated by steadily increasing life expectancy). But the use of Social Security money for other purposes by politicians is not among the issues which need to be solved, nor is there a major problem with benefits being received by those not entitled. There is, however, no doubt that the Social Security program must be reformed to avoid future insolvency, and AMAC has offered Congress a viable plan to do that. See this.

If you have questions about Social Security – how benefits work, or about your personal circumstances related to Social Security, or simply to dispel a myth – the AMAC Foundation’s Social Security Advisory Service can help, and there is never a fee for our services because we are a non-profit organization. Contact the AMAC Foundation at 1.888.750.2622, or via email at SSAdvisor@amacfoundation.org for answers to all your Social Security questions.

[1] Franklin Delano Roosevelt – October 26, 1939