If you've heard the rumors that Social Security is on the verge of bankruptcy, you should know that they're grossly exaggerated.

Yes, Social Security is facing some financial challenges. In the coming years, it's expected to owe more money in benefits than it collects in revenue, largely due to a mass exodus of baby boomers from the labor force. And while the program has trust funds it can tap to bridge that gap for a limited period of time, Social Security's cash reserves are expected to run dry by 2035.

Now, this doesn't mean that Social Security will have to stop paying benefits completely in 2035. Rather, it may need to reduce benefit payments to the tune of around 20%.

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Source Fool.com