2 legitimate Social Security worries, and 1 reason not to be concerned

While a strong case can be made that Medicare is America's most important social program, and there is a chance it could be a few decades from now, Social Security probably plays a more critical role in the financial well-being of many seniors. Every month, more than 42 million seniors receives a check from Social Security, and a little over three out of five of these seniors relies on their stipend for at least half of their income. In fact, a third of seniors relies on Social Security for at least 90% of their monthly income.

As you might imagine, with Social Security holding such high importance for seniors, any rumors or concerns about the program are bound to rile up seniors, pre-retirees, and even working Americans who one day hope to receive a benefit check of their own during retirement. Some of these concerns – two in particular -- have validity, and they should be something pre-retirees and retirees think about. On the other hand, one Social Security worry isn't something that any workers or retirees should concern themselves with.

RELATED: Best places to live on a Social Security check

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Best places to live on a Social Security check

SPRINGFIELD, MO.

Springfield, located in the southwest corner of Missouri, is among the most affordable cities to live when you have $0 saved for retirement. According to Numbeo's Cost of Living Index for 2017, the rent in Springfield is less than 19 percent of that in NYC while the general cost of living plus rent is 41.09 percent.

The average Social Security check each retiree receives here is $1,300.51. That's good news considering you can get a downtown one-bedroom apartment for around $507, or $450 elsewhere.

Best of all, Springfield is a lively town close to recreational areas. Springfield/Greene County has over 100 parks, including Lake Springfield Park, which is perfect for kayaking and canoeing. And you'll find lots of bike paths in and around town as well as lakes and streams popular with fishermen. 

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ATHENS, GA.

When you're trying to make the most of your Social Security check, look no further than Athens. The city of some 200,000 residents has a cost of living that is 6.2 percent below that of the national average, according to Forbes. Your cost to rent in Athens is less than one-quarter than what you would pay in NYC and, when you factor in groceries, transportation, restaurants and other day-to-day expenses, you'll live in Athens for just 43.88 percent of what you'd pay in the Big Apple.

Since the town is the home turf of the University of Georgia, you'll find lots of low-cost eateries as well as cultural activities. The art and music venues are impressive. Athens is also known for its annual bicycle races called the Twilight Series.

So, how much does a one-bedroom apartment cost in Athens? Count on paying a little over $700 for a downtown apartment and around $600 elsewhere. Considering the average monthly Social Security retirement check in Georgia is $1,304.44, you'll have plenty of cash leftover after bills.

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TUCSON, ARIZ.

If you prefer year-round warm weather, consider Tucson, a large city in Arizona's Sonoran Desert. Tucson's cost of living is delightfully low, with rent prices less than a quarter of NYC rent. You can find a one-bedroom apartment for $578 if you don't want to be downtown — $686 if you do.

When you include rent, groceries and other living expenses, a Tucson resident spends only 45.17 percent of the amount spent by NYC dwellers. And, the typical Social Security retirement check here is above the national average, at $1,343.51.

Over half a million people live in Tucson, and the city continues to grow. The downtown is compact, with a small historic district. Nearby you'll find the University of Arizona. Tucson is an attractive city surrounded by several high, forested mountain ranges, including the Santa Catalina Mountains.

See: Here's What an Average Apartment Costs in 50 U.S. Cities 

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MOBILE, ALA.

Mobile is another city with a cost of living significantly lower than the U.S. average. Move here for retirement and you'll pay just 24.27 percent of NYC rental prices. That means you can get a one-bedroom apartment for between $600 and $650 just about anywhere you live in Mobile.

Once you include food, transportation and other expenses, you'll be paying less than half — 46.28 percent — of NYC prices. But, average Social Security checks are a little lower than what'd you expect, at $1,285.68.

Mobile is located on the Gulf Coast and has a rich history as an antebellum seaport. Today, it remains a major port and is sometimes compared to New Orleans — except a little more laid back.

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SHREVEPORT, LA.

Rent in Shreveport comes in at a monthly cost between $700 and $740, depending on your proximity to the city center.

Unfortunately, the average Social Security benefit in Louisiana is just $1,212.05, the lowest of any state, according to a GOBankingRates study on the best and worst states to retire rich.

Still, your cost to live in Louisiana is just 47.08 percent of that in NYC. Meanwhile, Shreveport is a cultural hub in the tri-state area of Arkansas, Louisiana and Texas.

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RENO, NEV.

Billed as "The Biggest Little City in the World," Reno living comes with a lot perks, most notably a cost of living that's less than 50 percent of NYC. Rent alone is just 31.04 percent the cost of NYC dwellings. Surprisingly, it's more expensive living outside of the downtown area. You'll pay around $750 for a one-bedroom apartment in the city center, but closer to $813 outside of it.

Reno's average Social Security check is $1,313.43, and you'll have plenty to do with your leftover money. Truckee River provides access to rafting, kayaking and fishing. There's also tons of festivals happening in Reno at any point in time, like the Reno River Festival and Artown Festival.

Be Prepared: 5 Social Security Changes to Watch for in 2017 

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ALBUQUERQUE, N.M.

Albuquerque is New Mexico's largest city, and it's one of the cheapest places to live. Its cost of living is similar to Shreveport, with rent near the city center at about $760, or about $640 outside the city.

In 2016, U.S. News & World Report named Albuquerque one of the 50 best places to live in America. It described this desert city's appeal as "a blend of modern times and Native American history." Albuquerque has a diverse population and is perhaps best known for its annual International Balloon Fiesta.

You'll also enjoy Old Town, where you'll find numerous restaurants, museums and galleries. One downside for retirees: The average Social Security retirement check received by folks living in Albuquerque is $1,227.11. So, be prepared when your check arrives

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OKLAHOMA CITY

In a rating of the top states for businesses in 2016, CNBC named Oklahoma the sixth-best state for cost of living. Oklahoma City, the state's largest city, has rent costs between $625 and $850. Between rent, groceries and utilities, you can expect to spend just 47.93 percent what you'd spend in NYC, a comparable amount to living in Reno or Mobile.

Average Social Security benefits come in at $1,277.14 — not the best, but also not the worst.

While you may not think of Oklahoma City as offering a stunning cityscape, National Geographic named it a must-see location in 2015. It gave shout outs to its community boathouse, new West River Trail and rebuilt MidTown.

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FORT WAYNE, IND.

Rent is low in Fort Wayne, about 22.73 percent of what you might pay in NYC. Retirees in this city can find a one-bedroom apartment for around $631, making it an affordable place to live. In fact, the cost of living in Indiana is an estimated 16 percent lower than the national average, according to data from AreaVibes. And Niche, which ranks and review neighborhoods, named Fort Wayne the cheapest city to live relative to income.

Average Social Security retirement benefits are a healthy $1,379.93. Once there, you'll enjoy the Foellinger-Freimann Botanical Conservatory, historical museums and the Black Pine Animal Sanctuary, among other attractions.

Up Next: 20 Unsettling Things You Need to Know About Social Security 

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Legitimate worry No. 1: Social Security benefits will be cut in the future

One of the biggest concerns for current and future retirees is what could happen with Social Security's payouts.

According to the Social Security Board of Trustees' annual report released earlier this year, the program is headed for a major inflection point as of 2022. Due to the ongoing retirement of baby boomers to the tune of more than 10,000 per day, as well as lengthening life expectancies, the Social Security Trust is expected to begin paying out more in benefits than it's collecting in revenue by 2022. By 2034, the $3 trillion in asset reserves will be depleted, leading to what the Trustees opine could be a cut to benefits of up to 23% in order to sustain the program through the year 2091. 

The average retired worker was receiving $1,371.14 a month from Social Security as of August 2017 , which was a decent amount above the federal poverty level. If Social Security benefits were slashed by 23%, the average retiree would only be netting $1,055.78 a month (in 2017 dollars). That's less than $1,000 above the federal poverty level on an annual basis.

There are numerous ways that Social Security's $12.5 trillion shortfall between 2034 and 2091 can be bridged, including raising new revenue and cutting back benefits. Unfortunately, little is getting done in Washington that suggests a resolution is coming anytime soon. Without additional revenue, a cut to benefits is a growing possibility.

Legitimate worry No. 2: You'll claim Social Security benefits too early

Another legitimate worry that future and even recent retirees should have is that they jump the gun and file for benefits too early.

For those not familiar with Social Security's claiming schedule, an individual is able to begin taking benefits as early as age 62, and at any point thereafter. Your benefits grow by approximately 8% per year beginning at age 62, and up until age 70. Thus, waiting to file for benefits can result in a much larger payout later.

The most important figure you need to know is your full retirement age, which is determined by your birth year. Your full retirement age is the point at which the Social Security Administration deems you eligible for 100% of your benefit. In the simplest terms, if you claim at any point before reaching your full retirement age (i.e., age 62 through one month prior to your full retirement age), your benefits are permanently reduced. Depending on your birth year, this could be up to a 30% reduction per month from your full retirement age benefit. Conversely, waiting until age 70 could boost your payout by 24% to 32%, depending on your birth year.

The obvious worry for early claimers is that they may not have enough income to meet their monthly expenses – and this is magnified by the possibility of a 23% haircut to benefits in just 17 years.

One of the biggest mistakes you can make is filing for benefits early if you have little or nothing saved for retirement. At least three in five Social Security recipients claims before their full retirement age, permanently reducing their payout. Not exactly a smart move if you're going to be heavily reliant on Social Security income.

You have nothing to worry about: Social Security won't go bankrupt

Finally, if the majority of the population would stop worrying about Social Security going bankrupt, that would be great!

As noted, the Trustees expect Social Security's asset reserves of $3 trillion to be completely gone by 2034. Many are viewing this depletion as an insolvency for Social Security, which would lead to bankruptcy. Fortunately, that's not the case. In fact, barring a Congressional change in the way that Social Security is funded, it's impossible to bankrupt.

America's most important program is funded three ways. The smallest contributor comes from the taxation of benefits. Yes, Social Security benefits are taxable if you earn too much annually, and in 2016 the taxation of benefits brought in $32.8 billion of the $957.5 billion the program collected. 

Secondly, interest earned from its asset reserves contributed $88.4 billion of the $957.5 billion. Social Security's more than $2.9 trillion in current asset reserves are primarily invested in special issue bonds, with a small amount in certificates of indebtedness.

The bulk of Social Security's revenue ($836.2 billion last year) is derived from a 12.4% payroll tax on earned income between $0.01 and $127,200, as of 2017. This tax isn't going to go away, even if the program's asset reserves are completely gone. Put simply, as long as people keep working, payroll tax dollars will be collected. Thus, Social Security will always have money flowing in that can be disbursed to eligible recipients.

Now, to be clear, this doesn't mean that Social Security's current payout schedule is sustainable. Forecasts from the Trustees are very clear that it's not. Therefore, while benefit cuts are a legitimate concern, the program going bankrupt is a silly worry. Social Security will be there when you retire. The real question is, in what capacity?

The $16,122 Social Security bonus most retirees completely overlook
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RELATED: 13 states that tax Social Security benefits

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The 13 states that tax Social Security benefits
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The 13 states that tax Social Security benefits

Colorado

(Adventure_Photo via Getty Images)

Connecticut

(SeanPavonePhoto via Getty Images)

Kansas

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Minnesota

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Missouri

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Montana

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Nebraska

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New Mexico

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North Dakota

(Ben Harding)

Rhode Island

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Utah

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Vermont

(DenisTangneyJr via Getty Images)

West Virginia

(DarrenFisher via Getty Images)

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