Five Important Facts About Social Security Benefits
July 22, 2020
Fact #1: Social Security is more than a retirement program. In June of 2019, statistics reveal that 1 in 6 U.S. Residents collected Social Security benefits, which includes retirement benefits, disability benefits, and young survivors of deceased parents benefits. This means that 63 million Americans are receiving Social Security benefits in one form or another. While retirement beneficiaries make up 4 in 5 people who receive benefits, one fifth of beneficiaries receive SSD or survivors benefits.
Fact #2: Social Security lifts more Americans out of poverty than any other program. Using the March 2019 Current Population Survey, Social Security helps lift 21.7 million Americans out of poverty. While most of these people are elderly, over 6.9 million people lifted out of poverty by Social Security benefits are under age 65, including 1.2 million children. Moreover, over 6 million children under age 18 lived in families that received income from Social Security. For over half of the elderly that receive Social Security, it provides at least 50% of their income and for 1 in 4 seniors, it provides at least 90% of their income.
Fact #3: Social Security Benefits are particularly important for women and people of color. The poverty rate among black and latino seniors is 2.5 times as high as it is for white seniors. This retirement wealth gap is even more accentuated when you consider people of color often have less opportunity to save and earn pensions. Likewise, for women Social Security plays a major role as women tend to earn less than men, take more time out of the paid workforce, live longer than men, accumulate less savings, and have less access to pensions. Women represent over 50% of Social Security beneficiaries in their 60's and 70% of beneficiaries in their 90's as well as comprising 96% of survivor beneficiaries.
Fact #4: Social Security benefits are fairly modest. The average Social Security Retirement benefits in 2019 was $1,470.00 per month, or $17,640.00 per year. The average person on Social Security Disability and the average survivor benefit was even less. World wide, Social Security benefits rank in the bottom third of developed countries in the percentage of an average worker's earnings replaced by a public pension system.
Fact#5: Social Security will not last forever if changes are not made. It is estimated that the combined retirement benefits and Disability Insurance trust fund will be exhausted in 2035. After 2035, due to the collection of future taxes, benefits could continue to be paid at 3/4 of the scheduled benefit amount.
Please see my May 8, 2020 Blog titled The Financial Outlook for the Social Security Disability Program for further information on the above.