Here is part two of a blog listing ten interesting facts about Social Security. This blog will cover facts six to ten, see part one for the first five!
- 40% of elderly Americans would be poor without Social Security.
More than 40 percent of Americans aged 65 and older would have incomes below the poverty line if they didn’t receive Social Security benefits. Even with Social Security benefits, 10 percent of Americans do, in fact, have incomes below the poverty line. Social Security prevents 14.5 million elderly Americans from reaching this threshold poverty level.
- Most elderly recipients of Social Security rely upon it for the majority of their income.
Social Security provides the majority of cash income for 61 percent of elderly beneficiaries. One in three elderly Americans receive 90 percent or more of their income from the program. Because most folks outlive their earnings, as people age, their reliance on Social Security increases. Among beneficiaries aged 80 or older, 72 percent of beneficiaries receive the majority of their income, and 42 percent receive all of their income, from Social Security.
- Social Security benefits minorities.
Social Security is of particular importance for groups with low earnings and less of an opportunity to increase their income through pension savings. While Social Security represents 32 percent of income for whites aged 65 and older, it represents 90 percent or more of income for 52 percent of Latinos, 45 percent of African-Americans, and 41 percent of Asian-Americans.
- Social Security benefits women.
Women comprise 56 percent of beneficiaries aged 62 and older and 66 percent of beneficiaries aged 85 and older. As would be expected, women comprise 97 percent of Social Security survivor beneficiaries. As women earn more than men on average, Social Security is especially important for them as they also live longer, save less income, and receive smaller pensions.
- Modest changes would improve Social Security’s financial stability.
For the last thirty years, Social Security has collected more in taxes and other income annually than it pays out in benefits thus amassing trust funds of $2.8 trillion, invested in interest-bearing Treasury securities. However, as more baby boomers retire, Social Security’s costs will grow.
The trustees of the Social Security trust fund estimate that even if no further action was taken, Social Security’s combined Old-Age and Survivors Insurance (OASI) and DI trust funds will be exhausted in 2034. After 2034, even if no further action was taken, Social Security could still pay 75% of scheduled benefits, based upon its reliance upon collected Social Security taxes. As I wrote in an earlier blog, the system is not broke! A program implanting some tax increases and benefit modifications, should make the program even more stable on an indefinite basis.
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