UNDERSTANDING
SOCIAL SECURITYA. Q. What is Social Security?
A. One of the bedrock programs from Franklin D. Roosevelt’s New Deal. Social Security provides monthly payments to retirees, disabled Americans and the survivors of deceased workers. Social Security expects to pay $509 billion in benefits to 48 million Americans this year. The average monthly retirement benefit is $955.
Q. How does it work?
A. It is essentially an income-transfer program. Payroll taxes from workers fund benefits to retirees. The current tax rate is 12.4 percent – 6.2 percent from workers and 6.2 percent from employers.
B.
FACTS AND FIGURES
Current beneficiaries:
Retirees and their families -
Disabled workers, their families
Average monthly benefit:
Retired men -
Retired women -
Retired couple -
Disabled worker -
Current Payroll tax rates:
Employee (5.3% Old-Age and Survivors’ Insurance + 0.9% Disability Insurance)Employer (5.3% Old-Age and Survivors’ Insurance + 0.9% Disability Insurance)
Total (10.6% Old-Age and Survivors’ Insurance + 18% Disabled Insurance)
32.6 million
7.6 million
$1,038
$ 797
$1,523
$ 862
6.2%
6.2%
12.4%
C. Did you know?
◘ More than nine out of 10 Americans 65 and older receive Social Security benefits.◘ Social Security benefits make up 39% of the income of the elderly. Social Security is the only source of income for about 22 % of the elderly.
◘ Ninety-six percent of all workers – about 159 million workers – are covered under Social Security. Fifty-three percent of the work force has no private pension coverage, and 32 percent have no savings set aside specifically for retirement.
◘ Since the Social Security program began in 1935, the life expectancy of a 65-year old was 12 ½ years – now, it’s 17 ½.
◘ Between now and 2031, the number of older Americans will almost double, from 37 million to 71 million.
◘ Today, there are 3.3 workers for each Social Security beneficiary. In 2031, there will be 2.1 workers for each beneficiary.
◘ Between 1937, when the first Social Security taxes were collected, and 2002, the program has received more than $8.7 trillion in income.
F. Darrell Lindsey
U.S. Licensed Agent/Producer
46 Years Experience
U.S. Licensed Agent/Broker
