A Teachable Moment about Social Security Benefits
Reading Time: 2 MinutesLast Updated: November 6, 2023
It appears we have a knowledge gap among younger workers when it comes to Social Security. Recent analysis from the nonpartisan Employee Benefit Research Institute (EBRI) shows a quarter of younger workers believe that Social Security will not be part of their income in retirement. This compares with 13% of those over 45 who believe the same thing.
Younger men are more likely (29%) than younger women (21%) to say Social Security will not be an income source in retirement. And 41% of the nonbelievers have talked with a professional financial advisor about retirement planning, suggesting there are advisors out there who are discounting Social Security, too.
Younger workers who have estimated their Social Security benefit are more likely to believe it will be a source of income in retirement (28%) than those who haven’t (20%).
It appears we have a ‘teachable moment.’ For the average worker, Social Security may replace about 40% of preretirement income. It’s important to factor this benefit into their retirement planning. Think about how much of an impact 40% can have. If you’re training for a marathon, would you want to run 36.5 miles? Or stick with 26.2, which is 40% less of a trek. When you’re figuring out how much you need to save for retirement, isn’t it good to know that about 40% of your goal is automatically covered?
An easy way for workers to understand the role Social Security will play in their retirement is to go online to create a free my Social Security account today and get an estimate of future benefits.
Some of the knowledge gap may instead be a confidence gap. Under the intermediate assumptions of the 2014 Trustees Report, Social Security will be unable to pay full retirement benefits starting in 2033. If nothing is done by our lawmakers, benefits will be cut by about a quarter after 2033. Closing the funding gap would also likely help close the confidence gap.
Kathy Stokes is a communications consultant. She is the director of the American Savings Education Council, a national coalition of private and public sector institutions committed to making retirement planning and saving a priority for all Americans. ASEC is a program of the EBRI Education and Research Fund.
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Tags: retirement, social security, Social Security benefits, SSA
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Kathy Stokes, Director, American Savings Education Council
Director, American Savings Education Council
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polly
my sister (married over 15 years & divorced & age 73) has been told that she is not able to receive any ss from her divorced husband until he is deceased. Is this true?
Midge
This inuerdtcos a pleasingly rational point of view.
dick j.
How ? do I get around (regans Law) double dip law, as i have told. i retired from KP&F-Ks. i have worked all my life paying in to social security. I was advised i would draw $0000.00. BUT DUE TO ME DRAWING KP&F, i will only get $000.00. social security advised that i can pay THANKS – to P_ Ronald Regan- this to me is gov. theft.every month form me.. How would it be possible for P- Obama to over turn this law for i can get what i have worked for, before I DIE… thanks.
MikeB
I’ve been receiving Social Security for over two years now. However, back when I was in my 40s, I never counted on the program being there for me. So I can see the concern that younger people have. Interesting that someone asked if the government could guarantee it for their young son. Folks, nothing in life is guaranteed. Just ask the Greeks!
Joanne
I have a friend whose husband has dementia and is about to lose her job because of a store closing. She is a caregiver to her husband. Are there any benefits that would help her?
HunterSThompson
Try at the state level called “care-giver” benefits or something of that ilk. Unless she is over 62, then spousal benefits may be possible. Good luck!
Lorenzo D.
Joanne, thank you for trying to help your friend in this situation. Unfortunately, Social Security does not pay benefits for caregivers. If your friend’s husband is disabled and is not yet receiving Social Security Disability Benefits, she should contact us as soon as possible. If he qualifies to receive Disability or Retirement benefits, these benefits can be extended to his wife and to minor or disabled children. She can call our toll-free number 1-800-772-1213 (TTY 1-800-325-0778) between 7 a.m. and 7 p.m. Monday through Friday. Generally, you’ll have a shorter wait time if you call later in the week. We hope this information helps!
Stephen
My mother who died last year at 81 told me when she was a young woman in her late teens that stories abounded of how Social Security would not be there for her. Well including the time my Dad passed and her retirement she had over thirty years of benefits. Any planner who tells you that Social Security will not be there for you run do not walk away from them They are charlatans. The program has a minor actuary imbalance and could be fixed with a very modest cut in benefits , increase in the tax or a combination of both. And there is no shortfall for decades in the ability to pay benefits. The program as is can pay about 75% of benefits even then. Seniors are a major voting block and any congress who does not fix this program will shortly be replaced by one who will. The program to worry about is Medicare. But the ACA has given another decade of life to it. It too will be fixed before it runs out of money.
Nancy T.
Interesting comments. I was able to work full-time until I was 70 years old. I am now 76 and working part-time about six hours a week. The company I worked for only had a pension plan for us for a few years and then stopped it and gave the monies earned to it. I hired a Financial planner and with that small amount and a small inheritance, invested it all. At age 72 the RMD clicked in and I take it once a year. I don’t need it or the part-time money to live on at this time. My social security is about 2/3 of what my full-time employment paid. I rent a small apartment and live very comfortably. I find I have more money left at the end of the month than when I worked full-time. Why? I don’t need the wardrobe I needed when working, don’t have the wear and tear on my car (which I saved money over the years so I could pay cash for the one I purchased two years ago.) I also don’t have to eat lunch out every day, Things like that. How do I live so well? I learned at a young age how to manage my money and I have no debt. Only use credit card if I can pay it off each month. The most important principle I learned and abide by is LIVE BELOW YOUR MEANS. People today think they have to have it all – cable or satellite tv, daily newspaper, expensive steaks, eat out at the best restaurants, shop at the most expensive stores, etc. I don’t go on expensive vacations. I am busy all the time and enjoy life to the fullest. I volunteer at our local Botanical Garden and take about ten to twelve exercise classes weekly at the local Senior Centers and Rec Centers. My supplemental health insurance has Silver Sneakers so I can attend the Rec Center with no cost. That’ alone is a saving of over $200 per year. I am blessed.
HunterSThompson
Nancy, you are my hero. Well said. VERY well said. everyone posting here should read this. Good for you!
Candice A.
Nice facts and an interesting read thank you for posting!
Kathryn L.
“It appears we have a ‘teachable moment.’ For the average worker, Social Security may replace about 40% of preretirement income. ” In paragraph 4, shouldn’t that say “post retirement”?
HunterSThompson
No. it means 40% of what the person was making BEFORE (pre) retiring. So if they made 3000.00 a month working, it is expected to make up for @ 1200.00 ( or 40% ). You were right though, it was a teaching moment.
edith
it is true that ss was never meant to be one’s sole income and that one should save. however for many women, there is still a glass ceiling and for those with disabilities, they are work limited and therefore, cannot earn enough to have other investments. what should such ppl like that do if they cannot work, or are work limited or face discrimination due to the glass ceiling?
Eugene S.
Social Security and Social Security Disability are misleading. Social Security Disability means person unable to work at a reasonable earning level. Always the person is below retirement age. This leaves them with a hardship of not being able to supplement their income. Therefore, the government needs to adjust the law so that social Securitry Disability would be paid at a higher level then regular Social Security.
HunterSThompson
It is. It is basically equal to what the person would get if they waited until their full retirement age.
Eileen O.
I had to retire at age 60 due to partly bad knees and partly due to my company revising the whole system meaning high rated employees were no longer valuable. one by one got us to leave or be fired for one thing or another. At any rate. I was able to take my deceased husbands SS, until I turned 65 then went on my own as it was larger. plus have a small pension. I have downsized twice, now in a new senior complex built by hud and managed by a senior apartment system. it give me twice as much to live on. when its time, look for these places, luckily these are new and clean, in a good area.
I also worry about my children, they are all within 10-15 years of retiring, They know its tough and are saving. but as has been said if our money we paid all those years hadn’t been stolen and used for everything else it would be there longer.
Another big problem is, who is getting paid who shouldn’t? we all know the answer to that one. illegals and politicians