Scan the Internet and you will find any number of dire reports of seniors living only on their Social Security, living in poverty, benefit check to benefit check. Frequently these data are used to lobby for higher Social Security benefits (before we even make it sustainable for future generations). But is all this angst based on correct data?
Perhaps not‼️ Take a look at this article which raises some interesting questions about the figures we have come to accept.
Let’s start at the beginning. The Social Security Administration, at which I in the past worked, has long published figures purporting to show how much retirees depend upon Social Security as part of their total income. According to the latest SSA figures I could find, SSA states that 34% of retirees receive 90% or more of their income from Social Security. These figures are used by outside groups to argue that Social Security’s funding shortfall should be resolved by raising taxes rather than reducing benefits for retirees. But, as we’ll see, the true figure isn’t 34% but closer to one-third that amount.
No need to jump for joy, however. Saving for retirement is still essential. Social Security is designed to replace only 40% of pre-retirement income and for most people it doesn’t even do that.