4 Common Social Security Assumptions Retirees Commonly Believe

Experts say thinking Social Security will cover all expenses and underestimating health care costs in retirement are common misconceptions among retirees.

Juliette Fairley

Published: 6/23/2025, 10:13:35 PM EDT

4 Common Social Security Assumptions Retirees Commonly Believe — A Social Security Administration (SSA) office in Washington on March 26, 2025. (Saul Loeb/AFP via Getty Images)

There is a wealth of guidance dedicated to helping people make the most of Social Security in retirement. But financial planners caution against four common assumptions people tend to make that could sink their golden years or, at the very least, cause them to be overly challenging.

Assuming Social Security Will Cover All Expenses

While many look to social security benefits to fully cover their retirement expenses, certified financial planner Cary Carbonaro advises that, in most cases, they will not.

“Social security was never designed to do this,” Carbonara told NTD on June 23. “It was always supposed to be a combination of retirement assets, such as social security, and a pension, if you are lucky, and outside assets to fully fund your retirement.”

A Fidelity Investments study found that health care and medical expenses for people entering retirement age have grown nearly 5 percent since 2023 and more than doubled since 2002.

Underestimating Health Care Costs

According to the study, a 65-year-old can expect to spend an average of $165,000 in health care and medical expenses throughout retirement on an average monthly Social Security payout of $1,976, according to Social Security Administration (SSA) estimates.

As a result, many people who claim Social Security benefits before Medicare enrollment begins at 65 years old might find that medical costs can complicate their carefully planned budget.

That’s because medical costs are climbing fast, and most pre-retirees under-guess their expenses by thousands a year, according to registered life insurance agent and co-founder of BecaLife.com, Yehuda Tropper.

“Those misfires can drain portfolios faster than any market correction,” Tropper told NTD on June 23. “Bake in realistic Medicare premiums, gap coverage, and a dedicated long-term-care strategy before declaring your nest egg is enough.”

Assuming You Remain Willing and Able to Work

Americans are permitted to claim Social Security benefits as soon as 62 years old.

Each year that Social Security income is delayed from 67 to 70 years old, that benefit will increase by 8 percent.

However, Blanchard and Company President & CEO David Beahm tells his clients that although they may be willing to work, there is no guarantee they will be able to work.

“Work is an asset with an unpredictable shelf life,” Beahm told NTD on June 23. “Health issues, layoffs, or caregiving duties push roughly half of workers out earlier than planned, and losing a salary even five years early can shred lifetime cash flow and force hasty Social Security claims.”

He advises building a baseline plan that stops earned income at 60 years old.

“Treat any extra working years as a bonus to shore up savings or delay withdrawals rather than the core of your strategy,” Beahm said.

Expecting Day-to-Day Expenses to Shrink in Retirement

Since 1940, when SSA began paying benefits to retired workers, the longevity of older Americans has intensified.

The American Academy of Actuaries reported in its 'Raising the Social Security Retirement Age' brief that life expectancy after reaching 65 years old has increased by 18.1 years for men and 20.6 years for women.

As a result, Carbonara advises her clients that it’s possible they could live longer than they planned or budgeted for.

“We have more free time and all that time we were at work is now ours to spend enjoying ourselves,” she added. “Our hobbies and travel costs money. Healthcare costs are always rising and more expensive than expected. Many retirees do not downsize, and housing costs are at all-time highs.”

The views and opinions expressed are those of the interviewees. They are meant for general informational purposes only and should not be construed or interpreted as a recommendation or solicitation. NTD does not provide investment, tax, legal, financial planning, estate planning, or any other personal finance advice. NTD holds no liability for the accuracy or timeliness of the information provided.