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How secure is your Social Security?
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By ASHLEY CISNEROS acisneros@lakecityreporter.com
Today marks the 70th anniversary of one of the most talked about topics in American government - Social Security. Millions depend on it. Some worry that it won't be around much longer.
"I think the main point is that it has been successful for 70 years," said Jeff Johnson, advocacy manager for the American Association of Retired Persons. "One in five Floridians receive Social Security with a third of benefits going to the disabled and survivors. It pumps more than $33 billion into the state through benefits."
The rules of retirement
The pay-as-you-go system allows today's taxpayers to pay for the benefits of yesterday's workers. It is a self-perpetuating system that depends mostly on the investment of trust funds from payroll taxes, according to the Claude Pepper Social Security Reform Web site.
People born in 1929 or later need to have worked at least 10 years to be eligible for retirement benefits. For workers born before 1938, the full retirement age is 65. Due to longer life expectancies, the age is increasing for people born after 1938. People can receive benefits at age 62, but the amount they receive each month will be less than if they start at 65.
Those who are 62 or older and have been divorced after at least 10 years of marriage, can collect retirement benefits on the former spouse's record if the spouse is entitled to or is receiving benefits. If a person gets benefits when he or she turns 65, the Medicare Hospital Benefits start automatically.
The roots of Social Security
The Social Security Act was signed by President Franklin Delano Roosevelt on Aug. 14, 1935. It contained the first national unemployment compensation program, assistance to states for health and welfare initiatives and the Aid to Dependent Children program.
At that time, the retirement age was 65. Taxes were collected two years later and the first one-time lump sum payments were made that very month. By January 1940, the regular ongoing monthly
benefits started.
Originally, the bill was called the Economic Security Act, but the name was changed later during congressional consideration. At first, the program was just for the retired worker. From 1937 through 2003, the program has paid out more than $7.9 trillion according to the SSA Web site. During the same time, the program has collected more than $9.3
trillion in income.
Family was added in 1939 and the disabled in 1956. In 1950, changes were made to include an additional 10 million Americans who had been working in jobs not previously covered.
Medicare passed into law 30 years after the Social Security Act. It was signed by President Lyndon Johnson. Beneficiaries were first able to sign up in 1966. This social insurance program provided health coverage to almost all Americans aged 65 or older.
The Trusts
Social Security funds are divided into four trust funds:
n The Old-Age and Survivors' Insurance Fund (OASI) is the biggest. It provides benefits to retirees beginning at age 62 and full benefits to those 65 or older.
n The Disability Insurance Fund (Di).
n The Hospital Insurance Fund (HI).
These two programs benefit workers who have been seriously or permanently injured. Those who are sick and those who have been hospitalized also receive assistance from these funds.
n The Supplemental Insurance Fund covers medical expenses not covered by the others.
Most of the SMI is funded by general revenues. When the American economy is strong, Social Security is strong. Inflation and unemployment can hurt the program. When prices increase over a long period of time, the funds can deplete faster than they can be replenished.
A scare, then salvation
The first scare came in the 1970s. In 1975, legislation went into effect that indexed benefits to the inflation rate.
During this time, inflation rose and the United States suffered from a recession. Meanwhile amounts of Social Security benefits rose at an alarming rate. In addition, the payroll tax increased from 11.7 percent to 13.4 percent by 1982.
In 1979, the country continued to suffer from inflation and a second oil crisis. Social Security was saved in the early 1980s, thanks to the National Commission on Social Security Reform established by President Ronald Reagan in 1981.
They came up with several compromises in an effort to save the program, which included contribution raise increases, an increase in payroll taxes for the self-employed, an additional payroll tax imposed on higher income beneficiaries, mandatory participation by non-profit organizations and federal employees, and the postponement of cost-of-living adjustments.
In 1983, after signing the Social Security Amendments Act, Reagan said the bill "assures the elderly that America will always keep the promises made in troubled times a half a century ago." He continued, "it assures those who are still working that they, too, have a pact with the future. From this day forward they have our pledge that they will get their fair share of benefits when they retire."
A new scare?
Decades later, President George W. Bush worried the program might be in danger in the future.
In his Feb. 2 State of the Union address, he said, "The system, however, on its current path, is headed toward bankruptcy. And so we must join together to strengthen and save Social Security."
The issue has become the center of a huge debate. There is talk that the baby boomer generation will use benefits faster than they can be replenished. Some say the program will be extinct in about 30 years, leaving nothing for young American workers today.
"It's existence has been a concern for a long time," said AARP's Jeff Johnson. "I have met AARP members in their 70s who worried that it wouldn't be available for them. We need to speak up and make sure it stays strong. We need to address long-term financing. Some theorize that by 2041 Social Security will not bring in enough. We would like to see that addressed. We think it can be. We have some 36 years to act."
He said the AARP would like to see the program strengthened, not weakened.
"Some people in Congress want otherwise," Johnson said. "There is talk of some bills which will take money and divert it into private programs and we oppose that."
He encourages residents to contact their congressmen and senators.
"This legislation could happen this year," Johnson said. "It may be the most successful domestic program in our nation's history. Social Security is critical to everyone's life, whether they collect or plan to collect later."
The numbers
There were more than 3.3 million beneficiaries in Florida in December 2004, according to the Social Security Administration. About 12,085 of those beneficiaries were in Columbia County. About 19.5 percent of the total population in Florida received benefits last year, according to the AARP.
This compares with almost 16 percent of Americans who receive Social Security. According to the AARP, the aged population in Florida has expanded. During 2003, Florida was home to about 17 million people with 17 percent being age 65 or older.
In 2015, the elder population is projected to make up 21 percent of the state's population. The AARP estimates this will climb to 26 percent by 2025. It found that half of the state's 65 and older population would be living below the poverty line if they did not have social security benefits. A quarter of elderly Floridians depend on the program as their sole source of income.
According to the newly released AARP study, "Social Security 70th Anniversary Survey Report: Trends over Time," 78 percent of people are "fairly well informed" about the program. Approximately nine-in-10 non-retired Americans want to know if Social Security will be available when they retire should they need it,
according to the survey.
"I think the main point is that it has been successful for 70 years," said Jeff Johnson, advocacy manager for the American Association of Retired Persons. "One in five Floridians receive Social Security with a third of benefits going to the disabled and survivors. It pumps more than $33 billion into the state through benefits."
The rules of retirement
The pay-as-you-go system allows today's taxpayers to pay for the benefits of yesterday's workers. It is a self-perpetuating system that depends mostly on the investment of trust funds from payroll taxes, according to the Claude Pepper Social Security Reform Web site.
People born in 1929 or later need to have worked at least 10 years to be eligible for retirement benefits. For workers born before 1938, the full retirement age is 65. Due to longer life expectancies, the age is increasing for people born after 1938. People can receive benefits at age 62, but the amount they receive each month will be less than if they start at 65.
Those who are 62 or older and have been divorced after at least 10 years of marriage, can collect retirement benefits on the former spouse's record if the spouse is entitled to or is receiving benefits. If a person gets benefits when he or she turns 65, the Medicare Hospital Benefits start automatically.
The roots of Social Security
The Social Security Act was signed by President Franklin Delano Roosevelt on Aug. 14, 1935. It contained the first national unemployment compensation program, assistance to states for health and welfare initiatives and the Aid to Dependent Children program.
At that time, the retirement age was 65. Taxes were collected two years later and the first one-time lump sum payments were made that very month. By January 1940, the regular ongoing monthly
benefits started.
Originally, the bill was called the Economic Security Act, but the name was changed later during congressional consideration. At first, the program was just for the retired worker. From 1937 through 2003, the program has paid out more than $7.9 trillion according to the SSA Web site. During the same time, the program has collected more than $9.3
trillion in income.
Family was added in 1939 and the disabled in 1956. In 1950, changes were made to include an additional 10 million Americans who had been working in jobs not previously covered.
Medicare passed into law 30 years after the Social Security Act. It was signed by President Lyndon Johnson. Beneficiaries were first able to sign up in 1966. This social insurance program provided health coverage to almost all Americans aged 65 or older.
The Trusts
Social Security funds are divided into four trust funds:
n The Old-Age and Survivors' Insurance Fund (OASI) is the biggest. It provides benefits to retirees beginning at age 62 and full benefits to those 65 or older.
n The Disability Insurance Fund (Di).
n The Hospital Insurance Fund (HI).
These two programs benefit workers who have been seriously or permanently injured. Those who are sick and those who have been hospitalized also receive assistance from these funds.
n The Supplemental Insurance Fund covers medical expenses not covered by the others.
Most of the SMI is funded by general revenues. When the American economy is strong, Social Security is strong. Inflation and unemployment can hurt the program. When prices increase over a long period of time, the funds can deplete faster than they can be replenished.
A scare, then salvation
The first scare came in the 1970s. In 1975, legislation went into effect that indexed benefits to the inflation rate.
During this time, inflation rose and the United States suffered from a recession. Meanwhile amounts of Social Security benefits rose at an alarming rate. In addition, the payroll tax increased from 11.7 percent to 13.4 percent by 1982.
In 1979, the country continued to suffer from inflation and a second oil crisis. Social Security was saved in the early 1980s, thanks to the National Commission on Social Security Reform established by President Ronald Reagan in 1981.
They came up with several compromises in an effort to save the program, which included contribution raise increases, an increase in payroll taxes for the self-employed, an additional payroll tax imposed on higher income beneficiaries, mandatory participation by non-profit organizations and federal employees, and the postponement of cost-of-living adjustments.
In 1983, after signing the Social Security Amendments Act, Reagan said the bill "assures the elderly that America will always keep the promises made in troubled times a half a century ago." He continued, "it assures those who are still working that they, too, have a pact with the future. From this day forward they have our pledge that they will get their fair share of benefits when they retire."
A new scare?
Decades later, President George W. Bush worried the program might be in danger in the future.
In his Feb. 2 State of the Union address, he said, "The system, however, on its current path, is headed toward bankruptcy. And so we must join together to strengthen and save Social Security."
The issue has become the center of a huge debate. There is talk that the baby boomer generation will use benefits faster than they can be replenished. Some say the program will be extinct in about 30 years, leaving nothing for young American workers today.
"It's existence has been a concern for a long time," said AARP's Jeff Johnson. "I have met AARP members in their 70s who worried that it wouldn't be available for them. We need to speak up and make sure it stays strong. We need to address long-term financing. Some theorize that by 2041 Social Security will not bring in enough. We would like to see that addressed. We think it can be. We have some 36 years to act."
He said the AARP would like to see the program strengthened, not weakened.
"Some people in Congress want otherwise," Johnson said. "There is talk of some bills which will take money and divert it into private programs and we oppose that."
He encourages residents to contact their congressmen and senators.
"This legislation could happen this year," Johnson said. "It may be the most successful domestic program in our nation's history. Social Security is critical to everyone's life, whether they collect or plan to collect later."
The numbers
There were more than 3.3 million beneficiaries in Florida in December 2004, according to the Social Security Administration. About 12,085 of those beneficiaries were in Columbia County. About 19.5 percent of the total population in Florida received benefits last year, according to the AARP.
This compares with almost 16 percent of Americans who receive Social Security. According to the AARP, the aged population in Florida has expanded. During 2003, Florida was home to about 17 million people with 17 percent being age 65 or older.
In 2015, the elder population is projected to make up 21 percent of the state's population. The AARP estimates this will climb to 26 percent by 2025. It found that half of the state's 65 and older population would be living below the poverty line if they did not have social security benefits. A quarter of elderly Floridians depend on the program as their sole source of income.
According to the newly released AARP study, "Social Security 70th Anniversary Survey Report: Trends over Time," 78 percent of people are "fairly well informed" about the program. Approximately nine-in-10 non-retired Americans want to know if Social Security will be available when they retire should they need it,
according to the survey.
. wrote on Jan 30, 2008 11:01 AM: