10/27/2011 6:45 PM ET|
More rely on Social Security
Monthly benefit checks have a big role in funding retirement -- they make up nearly 40% of retirement income. Still, the size of a typical check is smaller than you might think.
Social Security is the most significant source of income for Americans age 65 and older, and its importance has continued to grow, according to a recent Social Security Administration report (.pdf file).
Social Security made up 38% of the total income of people age 65 and older in 2009 -- up from 30% in 1962 -- and is the largest source of retirement income. The second-largest share of retirement income is earnings from work (29%), a proportion that has remained consistent since 1962. Asset income has shrunk from 15% of retirement income in 1962 to 11% in 2009. Over the same period, income from private pensions has grown from 3% to 9%, and government employee pensions have increased from 6% to 9% of all retirement income.
Only a fortunate minority of Americans have significant sources of retirement income other than Social Security. Social Security made up 50% or more of the retirement income of 66% of Americans age 65 and older in 2009, up from 64% in 2008. And more than a third of retirees (35%) receive 90% or more of their income as a monthly payment from the Social Security Administration.
Social Security also covers more people than any other type of retirement benefit. The great majority of retired Americans age 65 and older (87%) received Social Security income in 2009, up from 69% in 1962. In contrast, only about half (53%) of older Americans have asset income in retirement, a proportion that is unchanged since 1962. The proportion of retirees receiving private-sector pension income has grown from 9% to 28%. And 14% of seniors have government pension income, up from 9% in 1962. The proportion of older Americans with income from work has fallen from just over a third in 1962 to about a quarter in 2009.
While Social Security makes up a large share of the typical retiree's income, the checks are fairly small. The average monthly payout to retired workers was $1,176 in 2010. More than 54 million Americans were paid a Social Security benefit last year. Retired workers make up the bulk of people receiving Social Security payments (64%), but the program also makes payments to disabled workers (15%), spouses of deceased workers (12%), and the spouses and children of retired or disabled workers (9%).
The proportion of women receiving retired-worker benefits has quadrupled since the program was founded, from 12% in 1940 to 49% in 2010. About a quarter (26%) of women age 62 or older received benefits on the basis of only their husband's earning record in 2010, down from 57% in 1960. A growing share of women (28%) now have a dual entitlement to Social Security on the basis of both individual and spousal earnings, up from 5% in 1960. Married individuals can claim Social Security on the basis of their own work record or up to half of the higher earner's benefit, whichever is higher.
Despite the program's growing importance, people now pay a smaller proportion of their income into the program than they did when it was founded. Only about 84% of earnings from employment were taxable in 2010, compared with 92% in 1937. That's because workers pay into the Social Security Trust Fund on earnings up to the taxable maximum, which was $106,800 in 2010. Some 6% of Americans had earnings from employment that exceeded the maximum amount subject to Social Security taxes in 2010, compared with 3% when the program began.
The federal program also has a long-term deficit. The Social Security Trust Fund is projected to be exhausted in 2036. At that time, payroll taxes and other income will generate only enough income to pay out 77% of program costs, unless tax increases, benefit cuts or other changes to the program are implemented.
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Yet, they reduced the amount being withheld this last year from employees as an economic booster? The government is threatening this program! Come on, folks, talk about a spin to the public to get rid of this program after robbing it? If anything, the one tax we should increase is the amount going to support our elders. Just because the voting pool of our elders is smaller, people in politics target this program. We need to take the income from somewhere else. Special interests ring a bell?
I'm sorry, I love my parents. I love my in-laws. By necessity, I can foresee having them live with us down the road if this program fails, robbing them of their independence after they paid into this program for years? I, myself, and my husband, have paid into this program for plus 25 years. Fix the program, make it work for what it was intended and don't rob our older generation.
Part of the problem with Social Security and its solvency is that the government has on several occasions 'borrowed' from it to pay other debts. If the government actually repaid the money they 'borrowed' and not just used IOU's the Social Security program would be solvent and not be projected to run out in 2036 as they say. I think the government needs to be held accountable somehow for that. Maybe take 2 years of the money they spend on ‘war’ and put it back into the Social Security funds. What ever happened to ‘taking care of home’ first. It seems we try to take care of the rest of the world and forget about our own country here at home……..
I am retired. I draw a pension from my last job and get Social Security checks. Unfortunately, I can't afford to own an island in the Pacific or a restored vintage airplane, but I get three meals a day and can go to the show or a resturant once or twice a month.
What burns me up are the people who see Social Security and pensions as "entitlements". Dude! We worked for that money and paid into those funds...and now it's an "entitlement"?
Sometimes I wish Social Security paid as well as they pay illegal aliens. That would be nice....free housing, free medical care, free food, and money to spend on anything I want. But, I'm a US citizen, and I'm not entitled to welfare, EBT cards, or all of the "perks" illegal aliens and dopers are able to get....I made the mistake of paying my taxes for most of my life and living here.
Well yes now. We have more depending on SSI. Like my 93 year old uncle who retired after decades of working for GM. He had a pension and health insurance. Until GM Bankrupted Obama style and he got thrown off all of his benefits. Yes he is living on SSI, he sold his things, sold his home where he and his wife raised kids since 1937.
Yes he's a sad case indeed. He was angry at first, then sad. Now he sits near the window in his tiny apartment and just stares. He's been ripped off by all the lies he was promised.
And some wonder when I say, I do not trust others with my future. Especially when I become so old and helpless I can't fight back.
I can only hope those who reaped the benefits get the same as they gave to him. Nothing in the end. Go on, just keep believing the lies.
I did everything that I was told to do, IRA, 401 K and personal savings. In the last twelve years, I have seen my money lose one third of its value instead of growing by that much. All those bubbles, allowed by our government, have busted my savings. My pensions from companies, now long gone, are small annuities that will never grow.
I am primarily living on Social Security, not my original plan but the one I am stuck with because our government was bought off by big business, banks and Wall Street, laws ignored, greed ignored, scams ignored and speculation ignored. All the same things that caused the Great Depression have caused the Great Recession. If our government and the political parties do not get their act together and work for America, we will have the Second Great Depression.
As usual, the old, colored, Mexicans and poor are nothing more than collateral damage in this mess. Work hard, save, dream and then get screwed appears to be the American Dream.
We the people of America have to demand a GAO a GOVERNMENT ACCOUNTING OFFICE audit of every political force that has touched, borrowed from SOCIAL SECURITY and know where they have spent the funds of the SOCIAL SECURITY SYSTEMS. We the people of America must criminalize every politician and staff member that knowingly or unknowingly misused our SOCIAL SECURITY FUND. .....AND, have this done before the elections of 2012. If not, they can go to prison after the election and after they have taken office. Remember Nixon, our great Republican President?
I still feel if we get rid of the "older, longer staying" Congressional people, and bring in new faces, we may fare much better. Our Congress is NOT working for US.. they are there for the money for themselves -- greed!! They have been passing laws/Bills without even reading their contents. Set them up with a one time amount they will receive as long as they are in office. No COLA's, no perks, etc., so they can see what it's like to live on limited income. It's time THEY take a cut in pay, instead of the hard-working Americans. The money saved could be well spent in helping to put Americans back to work.
Cain's 9-9-9 plan has now changed to 9-0-9.. that means his plan wouldn't have worked in the first place, but that didn't take a rocket scientist to figure out. My gosh, the millions of dollars being spent on campaigning alone, could probably put this country closer to the black, then the red we are now in. Campaigning should be about the issues, not how well financed one candidate is.
Seniors have lived through many, many years of past life. We helped to weave this country, as did our forefathers. But so many people want to see us in poverty. Go figure! Someone will, in time, pay for the crap going on in this country. The riots have started, and they are only going to get worse. Good luck, all.
The Blue Collar jobs that included pensions and health care have been given to the Communists. The American worker has been abandoned by Corporate greed.
How can the working class save anything for retirement with the crap jobs that if available, don't pay enough to purchase health care and pay the rent .
This is exactly what happens before every revolution in world history. It's coming here.
Bring our jobs back to America.
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