The Future of Social Security?
Many seniors are struggling in the face of the current economy, having seen their savings fall. The big question is -Will Social Security will be there to protect us? Today, nearly 54 million Americans receive Social Security benefits, including 38 million retirees and their family members, 10 million Americans with disabilities and their dependents, and 6 million survivors of deceased workers.
For many of these Americans, Social Security is a key source of income. In fact, for more than half of Social Security recipients aged 65 or over, the program provides over 50 percent of their family income and, because of its lifetime income protection and survivor’s benefits. Moreover, the program is not just for seniors. Because of features like survivors benefits, Social Security is one of the largest antipoverty programs for children, and disability benefits, also helping younger workers and their families.
Currently over 75 million working Americans—about half the workforce, lack access to retirement plans through their employers. In contrast, for workers who lack access to a retirement plan at their workplace, the current IRA participation rate tends to be less than one out of ten.
The job of the Social Security Administration is delivering a service, paying 59 million beneficiaries, and not financial planning. The agency provides loads of information about benefits on its website and does its best to answer the public’s questions in its field offices and by telephone. But a comprehensive talk about the nuances of Social Security and your financial future? That’s not going to happen.
Indeed, the Social Security Administration doesn’t know about—and it isn’t the agency’s job to know about—your household budget, your health, your savings, life insurance, plans you might have to work in retirement.
So, the onus is on you to learn about, or find help in deciphering, the basics: how benefits work, claiming strategies, possible pitfalls. And if you’re determined, for instance, on grabbing a payout at age 62 (the earliest possible date for most people) and locking yourself—and perhaps your spouse—into a permanent reduction in benefits, the agency isn’t going to stop you.
The agency, is overextended. In the past three years, it has lost 11,000 employees, or about 12% of its workforce; by 2022, about 60% of its supervisors will be eligible to retire. Meanwhile, budget cuts have resulted in the consolidation of 44 field offices, the closing of 503 contact stations (mobile service facilities) and one call center.
And that 800 number? According to a recent report from the agency’s inspector general, wait times in 2013 exceeded 10 minutes, an increase of more than five minutes from 2012.
The point: The Social Security Administration is grappling with its own problems just as the baby-boom generation, with about 75 million members, is moving full speed into retirement. (The oldest boomers are turning 68 this year.) The demands on the agency mean that you might not be able to find, or find in a timely fashion, the information or help you need. That being said, Ensure Capital is here to help.