Facts Social Security Administration Wants You to Understand
Social Security is one of the most important support programs in the country. The Social Security Administration tries its best to educate people about the program and its benefits. The SSA also publishes fact sheets twice a year to create further awareness. Here are some of the most pertinent Social Security facts from the 2017 SSA fact sheet:
1 – Approximately 25% of the Federal budget (~$955 billion) is being paid to Social Security annually. 87.3% of the $955 billion is generated from the 12.4% payroll income tax. The other 12.7% is paid for by the interest accrued on the program’s asset reserves and taxation of benefits.
2 – More than 171 million workers are covered by Social Security.
3 – 71% of the benefits are paid out to Retired Workers. Social Security benefits accrue at 8% per year, beginning at age 62 and increasing till you turn 70. So, to extract the maximum benefit, you should work at least 35 years and wait as long as possible before applying for social security benefits.
4 – The other 29% of benefits are paid out to the disabled (16%) and survivors (13%).
5 – According to the latest SSA statistics, 67% of today’s privately employed workers have no long-term disability insurance. If you are covered by social security, you will be taken care of, even if you haven’t yet collected all 40 work credits.
6 – Social Security also offers survivor’s protection insurance for worker’s dependents in case of an untimely death.
7 – More than 61% (of this percentage, 48% of retired married couples and 71% of unmarried retirees) of the seniors rely on their benefits for more than 50% of their monthly income.
8 – Of the rest of the retirees, about 43% of unmarried retirees and 21% of married retirees rely on social security payout for almost 90% of their monthly income.
9 – When the Social Security program was designed, the average life expectancy in the US was less than 70 years. Today, that average has gone up to 79 years. The worry here is how seniors will make ends meet when the social security program was designed to replace only about 40% of a working wage.
10 – Another cause for worry is that the baby boomers will reach retirement age in another 18 years or so. That, coupled with better healthcare facilities and medicines, leading to increased life expectancies, means there will be a 65% increase in the population of retirees who will need social security.
11 – With the baby boomers retiring, the payroll tax revenue is expected to drop by a huge 21%, as the worker population will decrease.
12 – More than 31% of Americans today have no retirement savings. This means, when they retire, they will be wholly dependent on their social security income for survival.
The biggest challenge is that unless Congress is able to come up with better solutions to generate revenue for the program, there will be a 23% cut in all social security benefits in another 17 years.