American retirees keep falling for this 1 Social Security myth — and it’s all based on wishful thinking. Are you getting duped, too?

Yes, Social Security recipients pay taxes — which may seem odd and redundant given all that money taken from your paychecks over the decades. Right now, those deductions equal 6.2% for full-time employees and 12.4% for the self-employed.

It makes sense that anyone with a long history of forking over payroll taxes would anticipate a day when your Social Security becomes a tax-free benefit. But other factors contribute to the confusion many retirees experience as they await a time that never arrives.

How Social Security taxation works

While Social Security and retirement accounts work in tandem to ensure a sound retirement, the fact is that they’re apples and oranges financially. That doesn’t stop people from potentially confusing events such as the required minimum distribution (RMD) age — when you must start tapping your accounts, currently 73 — with some imaginary point when Social Security payouts may no longer be taxed. Or just being stunned that these government benefits are taxed at all.

So here’s the straight facts, straight from the Social Security Administration: “You must pay taxes on up to 85% of your Social Security benefits.”

Got that? Age doesn’t matter. You pay up no matter how old or young you are. In fact, 10 states tax Social Security to various degrees: Colorado, Connecticut, Kansas, Minnesota, Montana, New Mexico, Rhode Island, Utah, Vermont and West Virginia.

There are exceptions on the federal level, but they only apply to those living on a minimal combined income, which includes your adjusted gross income, tax-exempt interest income and half of your Social Security benefits. It must total less than $25,000 (individuals) or $32,000 (married couples).

Generally speaking, those who live on Social Security alone won’t pay taxes, as it’s impossible to pass those thresholds. For 2024 retirees, the maximum monthly benefits ranged from $2,710 (age 62) to $4,873 (age 70).