Social Security: 10 Facts You Must Know
Social Security: 10 Facts You Must Know
Aug 17, 2014
Social Security is a very important part of your retirement planning, and it's important to know all the facts about benefits you'll receive, taxes you pay, and whether Social Security will be there for you when you need it.
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Social Security: 10 Facts You Must Know
1. Social Security Is Incredibly Important.
• 38 million retired workers.• 9 million survivors and
dependents.• 11 million disabled workers
and dependents.
In 2014, over 59 million Americans will receive Social Security:
2. The Elderly Rely on Social Security.
• Nine of 10 people age 65 or older get Social Security benefits.
• Benefits make up 38% of income.• Half of married couples and
three-quarters of singles get at least half their retirement income from Social Security.
Social Security is the major income source for older Americans.
Source: DavidYork71 and Mike Gravel, via Wikimedia Commons.
3. Workers Also Count on Social Security.
• Social Security covers 165 million workers.
• More than half of workers have no private pension coverage.
• More than a third of workers have no personal retirement savings.
Today’s workforce is also relying on Social Security being there in retirement.
Source: Wikimedia Commons.
4. But Social Security Isn’t Just for Retirees.
• 90% of workers have Social Security disability insurance protection.
• One in four 20-year-olds will become disabled before full retirement age.
• More than two-thirds of workers have no private long-term disability coverage.
16% of Social Security benefits go to disabled workers and dependents.
Source: U.S. Army.
5. Social Security Taxes Have Risen Over Time.
19371939
19411943
19451947
19491951
19531955
19571959
19611963
19651967
19691971
19731975
19771979
19811983
19851987
19891991
19931995
19971999
20012003
20052007
20092011
20130%
1%
2%
3%
4%
5%
6%
7%
Historical Social Security Tax Rate
Social Security Tax Rate
Year
Socia
l Sec
urity
Tax
Rat
e
6. So Have the Wages Taxed by Social Security.
19371939
19411943
19451947
19491951
19531955
19571959
19611963
19651967
19691971
19731975
19771979
19811983
19851987
19891991
19931995
19971999
20012003
20052007
20092011
20130
20,000
40,000
60,000
80,000
100,000
120,000
140,000
Historical Social Security Wage Base
Social Security Wage Base
Year
Socia
l Sec
urity
Wag
e Ba
se
7. But Social Security Has Financial Troubles.
• The Social Security Trust Fund is projected to run out of money in 2033.
• Once that happens, retirees will only get about 75% of anticipated benefits.
Source: Alex E. Proimos via Wikipedia.
Social Security relies on its Trust Fund to cover shortfalls between taxes collected and benefits paid.
8. Demographics Have Hurt Social Security.
• In 1950, there were 16 workers per Social Security recipient.
• In 1960, there were 5 workers per recipient.
• Now, there are 2.8 workers per recipient.
• In 2033, there will be 2.1 workers per recipient.
Image: Flickr source.
Fewer workers support more recipients of Social Security benefits.
9. Social Security Pays Big Benefits.
• Retired workers receive $1,294 on average monthly.
• Survivors’ benefits average $1,244 per month.
In 2014, Americans will receive $863 billion in Social Security benefits.
10. When You Take Social Security Matters.
Benefits can be more than 75% higher if you wait until age 70 versus taking them early at age 62.
How to Get More Income During Retirement
Social Security plays a key role in your financial security, but it’s not the only way to boost your retirement income. Our retirement experts give their
insight on a simple strategy to take advantage of a little-known IRS rule that can help ensure a more comfortable retirement for you and your family.
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