Medicare

Can you live on Social Security alone?

I would say no, but statistics say otherwise. Thirty-five percent of retirees receive 90% or more of their income from Social Security, but that does not consider assets or supplemental non-cash assistance. Nevertheless, for many, Social Security is essential even though it was never intended as primary retirement income. As FDR noted:

None of the sums of money paid out to individuals in assistance or in insurance will spell anything approaching abundance. But they will furnish that minimum necessity to keep a foothold…

While pensions were never available to the majority of Americans, they have largely disappeared in the private sector. Add to that the fact Americans are living longer, especially from age 65 forward, and that they are having children later in life thus meaning near retirement age children are still in college. In addition, many Americans are caregivers in later years.

Over the years since 1935 Congress has improved Social Security, but has consistently failed to adequately deal with the changes noted above. That is still true in 2019…and there is no excuse.

At the same time Americans also have responsibility because the great majority have failed to adjust their lifestyles to plan for the future. Can you live on Social Security … the way you would like to spend 20-30 years in retirement?

First, do you know your projected Social Security benefit? It’s easy to calculate, just go to ssa.gov and do a fast or detailed calculation.

Second, do you have a realistic idea of how much you will or want to spend each month in retirement? Will your mortgage be paid off? Do you want to spend more on a hobby or travel? Do you know the bite Medicare and Medigap coverage will take out of your income? Don’t know?

Get cracking, you shouldn’t even be thinking about retirement until you know your numbers.

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6 replies »

  1. You note: “… While pensions were never available to the majority of Americans, they have largely disappeared in the private sector. Add to that the fact Americans are living longer, especially from age 65 forward, and that they are having children later in life thus meaning near retirement age children are still in college. In addition, many Americans are caregivers in later years. Over the years since 1935 Congress has improved Social Security, but has consistently failed to adequately deal with the changes noted above. That is still true in 2019…and there is no excuse. …”

    I have to disagree. I don’t think we want a federal (or state or local, or combination of the three) government(s) that is (are) so grand and great in powers to assume the burden of health care and retirement preparation and who knows what else. I’ve spoken with these beltway inhabitants many times. Simply, they are neither savvy enough nor observant enough such that they can design and administer a program of sufficient diversity and efficiency (health coverage, retirement, whatever) that will effectively and cost-efficiently meet the needs of 330+ MM Americans.

    I don’t want the government mandating pensions, or retirement savings, etc. anymore than I want them mandating health coverage. There is already a dramatic transfer of wealth involved in existing entitlement programs – Social Security, Medicare, Medicaid, etc. The challenge for our elite government overseers is that they see things through their own eyes and biases. They like entitlement programs not so much because they help the less fortunate or lower income, but because they create dependency, and dependency buys votes. But then, after achieving dependency (as you note), the vote-buyers must disproportionately expand taxation on others who are not the net, net beneficiaries of government largess (and who know the source of revenues needed to maintain those vote-buying promises). And (as you note), Congress periodically improves the benefits from those entitlements in new rounds of vote-buying.

    Note the Ninth Amendment:

    “The enumeration in the Constitution, of certain rights, shall not be construed to deny or disparage others retained by the people.” Ours is to be a federal government of limited powers. The fact that the Bill of Rights didn’t confirm limits on the federal government with respect to each and every right, doesn’t mean that we have relinquished them. Like say, life, liberty and the pursuit of happiness? In Federalist 84, Alexander Hamilton asked, “Why declare that things shall not be done which there is no power to do?” Like Alexander Hamilton, Madison was concerned that enumerating various rights could “enlarge the powers delegated by the constitution” – suggesting that the Bill of Rights needed to be dramatically expanded to enumerate each and every right. Instead, the Ninth Amendment speaks of other rights than those enumerated in the Constitution. The character of those other rights was indicated by Madison in his speech introducing the Bill of Rights: “It has been said, by way of objection to a bill of rights….that in the Federal Government they are unnecessary, because the powers are enumerated, and it follows, that all that are not granted by the constitution are retained; that the constitution is a bill of powers, the great residuum being the rights of the people…”

    Note also the following amendment, the Tenth, which states: “The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.” The Supreme Court, in US v. Darby, 312 U.S. 100, 124 confirmed that the Federal Government was to be a government of express and limited powers. It held that the Tenth Amendment “… states but a truism that all is retained which has not been surrendered”.

    Surrender is a great word!

    I am not interested in surrendering any more freedoms to the federal, state or local governments.

    And, I am tired of my fellow Americans who assert that they want the best health coverage and retirement benefits YOUR money will buy! I clearly remember all of the individuals who I encountered who, like me, who sacrificed (worked multiple jobs, attended college at night while working during the day, serving in the military to qualify for the G.I. Bill, saved instead of spent, etc.) I assume you are no more interested in me in making such sacrifices if the socialists among us tax away wealth so as to provide additional income/benefits/preferences to those who were unwilling to make similar sacrifices.

    Tell Pocahontas and Bernie and the others, that I have already paid taxes on my income before it became part of my accumulated wealth. They can’t have any more!

    Liked by 1 person

    • As someone who has never had health insurance from my employer, why should my tax dollars subsidize your employer-paid insurance?

      All of my workplace compensation is taxable.

      How about you?

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      • One of my favorite stories in my 40 + year career in corporate benefits came very early on. I was complaining about Section 79 imputes income taxation of group life coverage where there was no company contribution, whatsoever. I let our tax attorney know this was stupid and completely arbitrary.

        He responded by reaching behind him to grab his Prentiss Hall three ring binder of the tax code(probably weighed 10+ pounds), he flung it across the room to land on the table in front of me, saying “show me anything in there that is not completely arbitrary”.

        He was right then, and that is still true today.

        Long ago, someone used the tax preference to buy votes.

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  2. I agree with Mr. Quinn. When we worked everything was much less money, the economy has boomed since our retirements and our incomes/savings have hardly been able to keep up with the costs of everything, so those of you who are calculating that you will have enough money, don’t count on things costing the same as they do today as an example, a car costs as much as a house did back when I worked, and car gas was $.18 a gallon etc, etc. No one ever heard of HOA’s back then so also add that into your costs if you plan to continue to live in a community as there are few areas of the country these days that don’t have them. So, yes, retirement was ok for the times for when costs were the same while I worked, however with technology and so many advances costs of services, purchases, and the list goes on have continued to rise. Also, one has to take into account that things that you can do for yourself now i.e. maybe car repairs, yards and repairs one is not as agile to be able to do some of these things so hiring outside labor is necessary. When I retired I thought I could live comfortably on my retirement and SS, however that is not the case and with the market dropping many times since my retirement, it has taken a toll on income from stocks/dividends. So, remember that your retirement may be good for today’s economy however one needs to project rising costs of everything so save well, as SS does not keep up with the actual rising costs in providing the income one needs Also as a widowed senior woman, 2 incomes won’t always be there for you. I hope all of you plan on rising costs and don’t consider the way you live now to be what it will be once you retire in the future, count on a considerably higher cost to live comfortably. So, yes, Mr. Quinn, one needs to project a much higher cost to live than what it currently costs. – and Social Security does not keep up with the rising costs, even with a COLA annually so everyone needs to save as much as possible because how you live today will not be how you live tomorrow unless you have savings.

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    • Everyone always brings up gas prices, but we are paying less for gas today than we did in 1974. Adjusted for inflation the 55 cents we paid = $3.05, today. By the way in retirement I spend way less on gas, since I do not have to drive to and from work 5 or 6 days per week. The major problem I see is people think they can retire in debt. I retired at age 50 and lived on credit and a small military pension, it took the first 18 month of Social Security benefits at age 62 to pay off all that debt. Rules I tell everyone I know now.
      1. Cut your budget and save 20% of your income for retirement, you will be very happy you did, I wish I would have done it.
      2. Pay off all debt before you retire, then you might just be able to live well in retirement.

      I am now in a financial position to live on my military pension and save and invest my Social Security benefits. I do live in the low cost of living state of Montana, no sales tax, low income and property taxes and low utility rates with hydroelectric and low natural gas prices. Life is good.

      Like

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