“The not-quite-so-good news is that for many of us, no matter our age, reaching a goal of early retirement will take some major mindset adjustments and lifestyle changes. Think cutting back on expenses and getting our income up. Will it be easy? Probably not. Will it be worth it? Absolutely.”
“The Social Security Fairness Act, signed into law in January by President Joe Biden, eliminated the Windfall Elimination Provision (WEP) and Government Pension Offset (GPO). Those measures reduced or prevented Social Security benefits for more than 3.2 million people with a pension and whose past work wasn’t subject to Social Security taxes, according to the Social Security Administration. Affected recipients include police officers, firefighters, postal workers and public school teachers.”
Social Security fraud does exist, but it’s relatively small compared to the total benefits paid. The Social Security Administration (SSA) has multiple fraud prevention measures, but errors and fraud still happen.
How Much Money Is Lost to Fraud?
1. Annual Estimated Losses
The SSA’s Office of the Inspector General (OIG) investigates fraud cases. In 2023, their reports estimated that around $8 billion in improper payments occurred. However, not all of this is fraud—many are errors (such as overpayments due to outdated records).
True fraud cases (deliberate deception) are harder to quantify but likely in the range of hundreds of millions rather than billions.
2. Types of Social Security Fraud
Receiving Benefits for a Deceased Person – Sometimes, relatives fail to report a beneficiary’s death and continue collecting payments.
Disability Fraud – People who falsely claim to be disabled while working or living a normal life.
Identity Theft – Criminals use stolen Social Security numbers to claim benefits fraudulently.
Representative Payee Fraud – A person managing benefits for someone else misuses the funds.
3. SSA’s Response to Fraud
The SSA cross-checks records with government death databases to prevent improper payments.
Banks are required to report deaths, and any checks sent to deceased individuals are supposed to be returned.
In 2022, the OIG recovered over $100 million in fraud cases.
How Big Is the Fraud Problem?
Compared to the $1.4 trillion Social Security pays out yearly, the fraud and improper payments make up less than 1% of total spending. While it’s a concern, it’s not a major drain on the system.
Here’s how to estimate your monthly Social Security income in retirement.
In 2024, the average Social Security benefit is $1,862 per month, while the maximum for those retiring at full retirement age is $3,822. Achieving the maximum requires earning the taxable maximum for 35 years.
