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Why the Social Security Administration Isn’t Helping People Maximize Their Benefits

The General Accounting Office recently published a survey they conducted after interviewing several people who had just visited face-to-face with an employee at one of the 550 Social Security offices. They found that less than 40 percent of these people received accurate information about the Social Security program, and no one got assistance on making the final decision of when to turn on benefits.
Statistics show that half of all retired people’s income is from Social Security benefits and that one-fourth of all retirees are totally dependent upon these benefits. Since Social Security benefits have become a key factor in not living in poverty, why can’t the Administration be helpful?
Here are some answers from my research on the matter. This information is mostly from Social Security Administration, and some from Social Security consulting firms:

  • The average life expectancy in 1935, when the Social Security program was initiated, was age 60. Today, for anyone who finally reaches age 65, their life expectancy changes to age 83 for males and 87 for females. This means Social Security will pay out trillions of dollars more than originally planned in 1935, when people died much earlier. At this point, there is question whether they will be able to pay at all in the near future, thus the silence on the part of the administration regarding benefits.
  • When Social Security started there were 160 workers paying into the system for every one person receiving benefits, or 160:1. Today three workers pay into the system for every one person receiving, or 3:1. Looks like in 2033 that number will be 2:1. How can two workers’ FICA tax pay for one retired person receiving benefits? It can’t.
  • The poverty rate for seniors in 1935 was 50 percent — today it is 9.5 percent. Because less retired people based on these numbers should have to rely on Social Security, the Administration isn’t too keen on being helpful about taking advantage of the program.
  • Every day, 10,000 people are turning age 65 right now and will continue for another 14 years. That total is 74,000,000 people that will be expecting to receive Social Security benefits in the next decade. The tax on the system is likely to be too much, so there’s no urgency on the part of the SSA to get people all excited about taking advantage of it.

These facts are real and we must manage this problem somehow. For each of us on a personal level, we need to manage our income and expenses more closely so we have a surplus and can take care of ourselves as we age, instead of relying on the government to do it for us. Right now, those receiving Social Security benefits have a pretty good deal, but as more Baby Boomers retire, the whole program is going to change.  Because of this uncertainty, now is the time to take charge of your own retirement future.
For more help in solving these concerns, visit www.moneymastery.com.

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