Depending on Social Security?
January 8, 2004
Substantially more young people believe in flying saucers than believe they will receive Social Security benefits, a Third Millennium survey found 10 years ago. Less than half (47 percent) of the 18- to 34-year-olds surveyed believed that flying saucers exist. But only 9 percent believed that Social Security would be able to pay their scheduled benefits.
Apparently, their parents and grandparents have more confidence in the system. The main source of income for today's seniors is Social Security. And many nearing retirement are depending on Social Security for most or all of their retirement income. According to recent figures from the Social Security Administration:
- Two retirees in 10 get 100 percent of their income from Social Security; 3 in 10 get 90 percent of their income from Social Security; and nearly two out of three retirees get at least half their income from Social Security.
- Without that income, nearly half of all retirees would officially be classified as impoverished.
- Yet nearly 70 percent of all men and 75 percent of all women take their benefits early and receive smaller monthly benefits -- including some who depend on
Social Security for most of their income.
Apparently, some retirees saved little, if anything, for their retirement. A recent Congressional Research Service report noted that the median value of all retirement accounts held by workers between 55 and 64 was $55,000 -- which would buy a life annuity of about $400 a month. You could have accumulated $55,000 over the last 20 years if you saved as little as $40 a month.
If we make the assumption that a couple retires with the average benefit, about $18,000 a year, nearly two-thirds of all retirees are living on less than $36,000 a year. Most are living on much less.
Source: Scott Burns, "Retirement promises, reality on crash course," Dallas Morning News, January 6, 2004.
Browse more articles on Tax and Spending Issues