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Social Security is, for many retirees, a vital source of income during their golden years. The Social Security Administration notes that 71% of unmarried elderly beneficiaries count on Social Security to provide at least half of their monthly income during retirement.

However, Social Security is also widely misunderstood. In 2015, more than 1,500 people took a 10-question Social Security quiz from MassMutual Financial Group on relatively straightforward concepts to test their understanding of America's most important social program. The results found that just 28% of test takers passed with seven correct answers, and just one out of the more than 1,500 survey takers got all 10 questions correct. What you don't know about Social Security could wind up costing you thousands, or tens of thousands, of dollars during your retirement.

Though a number of nuances about Social Security aren't well understood by working Americans and pre-retirees, there are two specific Social Security misconceptions that sit head and shoulders above everything else. Fall for one of these Social Security myths, and you could wind up wrecking your retirement.

Social Security misconception No. 1: It's going bankrupt

Easily the most pervasive misconception about Social Security is that the program is heading toward bankruptcy, and therefore, today's working generation shouldn't count on receiving any money from the program when they retire decades from now.

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This myth is compounded by estimates from the Social Security Board of Trustees in their 2016 annual report. The Trustees are forecasting a switch from a cash inflow to a cash outflow in the program beginning in the year 2020, with the Social Security Trust's more than $2.8 trillion in spare cash being completely exhausted by 2034. In some Americans' minds, the exhaustion of this spare cash means Social Security is no longer solvent.

Thankfully, this isn't true, and Social Security will be there to provide some degree of financial income during retirement for many generations to come. The reason? Look no further than the payroll tax.

The payroll tax is a 12.4% tax on wages earned between $1 and $127,200 in 2017. Any income earned above and beyond $127,200 is free and clear of the payroll tax. If you're employed by someone else, you'll split this tax down the middle, with you and your employer each paying 6.2%. If you're self-employed, you're on the hook for the full 12.4% up to the aforementioned payroll tax earnings cap of $127,200. The beauty of the payroll tax, and the reason that Social Security can never be insolvent, is that, as long as Americans are working, the tax is being collected and funding Social Security payouts.

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Keep in mind that there's a big difference between solvency and needing an adjustment. Social Security has no issues when it comes to solvency. If people are working and payroll tax revenue is being collected, beneficiaries are being paid. However, with a growing number of baby boomers set to leave the workforce, and life expectancies increasing by roughly nine years over the past five decades, there's a real possibility that benefits may need to be cut in order to sustain future payouts through the year 2090. The Trustees report pegged this across-the-board cut at 21%.

Long story short, while Social Security needs some congressional TLC, it's going to be there to provide some financial assistance to a vast majority of seniors during retirement.

Social Security misconception No. 2: You can rely on Social Security for a majority of your income

The other major Social Security misconception lies completely at the other end of the spectrum. It involves the belief that Social Security can effectively be your primary source of income during retirement.

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In reality, the Social Security Administration suggests that your Social Security benefits are designed to replace just 40% of your working wages. As you might imagine, this percentage is a bit lower for higher-income Americans, and a bit higher for lower-income Americans. Nonetheless, the point is that Social Security was never designed to be a major or sole income source for retired workers.

As noted above, the Social Security program could be facing a budgetary shortfall by the year 2034. If Congress fails to find a way to generate more revenue for the program, an across-the-board benefits cut may be needed. If you're among the 61% of current retirees who count on Social Security to provide at least half of your monthly income, you could be in big trouble with a 21% benefits cut possibly looming.

The solution is fairly simple for working Americans: You need alternative channels of income when you retire. Having additional sources of income beyond Social Security should ensure that you aren't too reliant on a program that could face a cut in benefits in less than two decades.

Today's working Americans have a smorgasbord of retirement options available, but an employer-sponsored 401(k) or Roth IRA could be the most intriguing.

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A 401(k) has a substantially higher annual contribution limit, when compared to a Roth IRA, of $18,000 for individuals aged 49 and under and $24,000 for seniors aged 50 and up. What's more, a number of employers that offer 401(k)s have been offering salary matches of around 3% to keep their employees happy, as well as retain talent. This is essentially free money being offered to working Americans who show the initiative to save for their futures.

The one downside to a 401(k) is that your account is tax-deferred, meaning you'll owe federal tax on the money once you begin making withdrawals during retirement. This could, potentially, put you into a higher tax bracket during retirement.

A Roth IRA, on the other hand, has a much smaller annual contribution limit -- $5,500 for workers aged 49 and under and $6,500 for seniors aged 50 and up – but it has one key advantage over the 401(k): Money contributed to a Roth is considered after-tax, meaning your account can grow over your lifetime completely free of taxation. This means any eligible withdrawals during retirement will not count toward your adjusted gross income, therefore not affecting your tax status.

To summarize: Don't discount what Social Security can add to your income stream during retirement, but at the same time, don't become over-reliant on a program that could face a cut in benefits within the next two decades.