Millions are confused by these Social Security and Medicare topics. Here’s what you need to know.

Some myths, such as ancient Greek myths, are good, providing insight into the human condition or simple entertainment. Other myths, however, can cause you to make bad decisions and possibly lose money. Social Security and Medicare myths fall into the latter category.

Here are some myths dispelled — to help you make smart decisions that can keep you healthier and more financially secure.

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The myths of social security have been dispelled

Myth: Social Security will run out of money soon

There is some truth to this, because Social Security surplus it runs out. The latest estimate is that the combined Old Age and Survivors Insurance (OASI) and Disability Insurance (DI) trust funds can pay 100% of Social Security liabilities by 2035, after which the funds received will only be able to cover 83% of expected payments due to beneficiaries. However, Social Security tax revenue will still come in so the system doesn’t break down. But if nothing is done, future retirees may only receive 83% of what they are owed.

Fortunately, there are several ways to save on Social Security, such as by increasing the tax rate that workers pay into the program, taxing more or all of workers’ income (high earners are currently only taxed on a part of their income) or raising the full retirement age.

Myth: You’re eligible to collect Social Security starting at age 65

Retirement benefits are actually available as early as age 62. Each of us has a “full retirement age” at which we can start collecting full Social Security benefits to which we are entitled, based on our earnings history. It’s 66 or 67 for most of us. Those who start collecting benefits early will get smaller ones — but lots of them. Delaying beyond full retirement age until age 70 will make them older — and that’s the best move for most (but not all) people. So decide when to start collecting Social Security carefully.

Myth: Social Security benefits increase every year

There i am cost of living adjustments (COLA) most years, but not every year. They usually aren’t even that high — the 2024 COLA was 3.2 percent, and the upcoming 2025 COLA could be less than 2.6 percent, according to the nonpartisan Seniors League.

Myth: Social Security benefits are not taxed

They are actually taxed by the federal government — and a handful of state tax benefits as well, though often very lightly. Currently, 41 states do not tax Social Security benefits.

Medicare myths dispelled

Here are some myths about Medicare:

Myth: You can enroll in Medicare anytime after age 65

There is some truth to this, but under certain circumstances, if you delay enrolling in Medicare after age 65, you may face a great lifetime Part B premium penalty: an extra 10% for each year you don’t enroll on time. So plan to enroll on time — during the seven-month “initial enrollment period,” which spans three months before your 65th birthday, your birthday month, and three months after your birthday month. (Some people can sign up later if they meet certain criteria.)

Myth: Medicare is free

No, it isn’t. Many people end up paying $0 in premiums for traditional Medicare Part A (which covers hospital and related expenses), but will still face co-pays and deductibles and often have to pay 20% of the cost of their care. Part B (which covers outpatient care, including doctor visits) has a premium due each month — and it’s $174.70 for most people for 2024. Again, there are other payments due on top of that. If you opt for a Medicare Advantage plan, you may pay less in premiums, and this is a solid option for many, but not all.

Myth: Medicare and Medicaid are very similar

They are actually quite different. Medicare is age-based, available to older Americans, while Medicaid is income-based, available to low-income people. Traditional Medicare doesn’t cover dental, vision, or hearing problems — or prescription drugs (so most people add Part D for that) — though Medicare Advantage plans tend to include that coverage. Medicaid differs from state to state, but there is no premium and much of the coverage it provides is free, including nursing home care. Some older and poorer people may qualify for both Medicare and Medicaid.

There are other myths and facts to know about both programs, and the more you know, the more you can get out of them. So, as you plan for your retirement, read up on both Social Security and Medicare.