For many retirees, Social Security benefits could make or break retirement. The average retiree collects just over $1,500 per month in benefits, according to the Social Security Administration, and that money can go a long way toward enabling you to enjoy your senior years comfortably.

However, there are a lot of myths and misunderstandings surrounding Social Security, and not fully understanding how the program works could potentially put your retirement in jeopardy. Especially with the COVID-19 pandemic wreaking havoc on millions of Americans' finances, it's important to avoid falling for these common Social Security myths.

Social Security card and assorted bills

Image source: Getty Images.

Myth no. 1: You can't continue working after claiming

With a second wave of coronavirus infections slamming the U.S., many workers may be worried about another round of layoffs. Those who are already unemployed might be concerned that their chances of finding a job in the near future are slim.

If you're eligible for Social Security benefits, you can begin claiming them as early as age 62. And if you lose your job and desperately need income, claiming benefits as early as possible could be a smart way to help make ends meet without digging yourself into debt or raiding your retirement savings.

However, some people may be concerned about claiming benefits if they're not ready to retire just yet. The good news, though, is that you can continue working even after you start collecting benefits. So if you find another job after the pandemic ends, you can keep working while receiving Social Security.

If you claim benefits before your full retirement age (FRA) -- which is either age 66, 67, or somewhere in between, depending on the year you were born -- your benefits could be temporarily reduced if you're working. But once you reach your FRA, the Social Security Administration will recalculate your benefit amount, and you'll start earning bigger checks to make up for the money that was withheld.

Myth no. 2: Benefits alone are enough to fund retirement

While Social Security benefits can help supplement your retirement income, they shouldn't be your sole source of earnings. Social Security benefits are only designed to replace approximately 40% of your income once you retire, so the other 60% will need to come from your savings, a pension, or other sources of income, assuming you're spending roughly the same amount in retirement as you were while you were working.

If you lose your job due to COVID-19, you may choose to retire earlier than planned. That could be a smart decision if you have a robust retirement fund and can afford to retire early. But if a stock market crash devastates your savings, you may have no choice but to rely on your benefits to make ends meet. And chances are you'll need to make some significant financial sacrifices to survive on Social Security alone.

Before you retire, make sure you won't be over-relying on your benefits. Continue saving in your retirement fund, and perhaps consider picking up a side hustle to create another income source. The less dependent you are on a single source of income in retirement, the better off you'll be.

Myth no. 3: Benefits will disappear soon

Social Security has been in the headlines a lot lately, and many workers are concerned that the program is running out of money. In fact, 74% of U.S. workers believe Social Security won't be available to them once they're ready to retire, according to a recent report from the Transamerica Center for Retirement Studies.

The truth is that Social Security is facing a cash shortage, but the program is not going to disappear completely. The Social Security Administration (SSA) primarily relies on payroll taxes to fund benefits, but because that's not enough to pay out benefits in full, it has also been leaning on its trust funds to cover the deficit. But once the trust funds are depleted (which will be around 2034, according to the SSA's latest estimates), the SSA won't have enough cash to continue paying out full benefits, and your monthly checks could be reduced by nearly 25%.

As long as workers continue paying payroll taxes, there will always be at least some money to pay out in benefits. It may not be enough to survive on in retirement -- especially if payroll taxes are reduced as part of the next coronavirus stimulus bill -- but benefits won't disappear completely. Still, though, it's a good idea to assume you won't be able to rely on Social Security for the majority of your income in retirement.

Creating a Social Security strategy

Social Security can be complex and confusing at times, but because it's such an important aspect of many older Americans' retirement plans, it's important to at least understand the basics. By separating fact from fiction, you can avoid falling for these common myths.