Is It Really Social (In) Security?

In my endless updating of demographic data, I stumbled across some social security figures this past week.

According to government data, the average recipient receives $1,404 per month. Okay, what is the big deal? Well, other data they published, admittedly a few years old, really got my attention. Consider the following:

—Some 19.7% of recipients obtain 100% of their annual income from Social Security (S.S.)

—33.4% derive 90%+ of their income from S.S.

—61.1% receive 50%+ of their income from S.S.

I knew that Social Security was a lifeline for many seniors but I found these numbers pretty jarring.

At the same time, most of you have heard or read that the Government Accounting Office (GAO) has projected that Social Security will go in to serious deficit mode in 2034. No, the Cassandras are wrong when they say the system will be totally broke. What they do say, however, is that benefits will have to be cut 24-25% unless significant changes are made in the funding meaning some combination of higher eligibility age, means testing for the affluent, or higher Social Security taxes for those with generous incomes.

Sadly, we have known about this for years but politicians do nothing. Certainly, they will act at some point but the measures may have to be really draconian if they wait until the deficit is right on top of us.

Amazingly, some people say do nothing. I read an article a few years ago by a mean spirited columnist who suggested that if we did nothing people would learn to save on their own. At the time I dismissed it as the work of a crackpot, but on a plane in August, I fell in to conversation with a fellow who said the same thing. When I asked about the pain that it would cause millions, he shrugged and said, “that is their problem.” I countered that not many 85 year olds can find steady work, but he would not budge. So, I gently (I thought) brought up the much quoted stats that over 40% of Americans cannot afford a $400 car repair bill or an emergency room visit.* So, how can millions fund a comfortable retirement when they lead a hand to mouth existence now? He got red in the face and called me a “pathetic bleeding heart liberal.” That was a first for me! :)

I would project that 90% of you reading this are in great shape for retirement. Yet if something is not done, the three stunning statistics at the top of this page will get even worse. And, video services will thrive as millions more than today will not be able to afford any other entertainment but “TV” in their retirement years.

If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com

*Source--Federal Reserve Board--Economic Well Being of U.S. Households, 2018