Think you can live on Social Security?

If you earned the maximum amount for your entire working life and delayed collecting benefits until age 70, the most you might receive from Social Security in 2020 roughly 45,500 per year.

Needless to say the average is much less, about $18,000 per year.

Why should this surprise you? Social Security was never intended to be the sole source of retirement income. And yet, many Americans live their working lives as if that were the case.

The question average Americans should ask is, can I live twenty plus years in retirement on 40% or less of what I earn today?

One comment

  1. As you may know, last year’s Social Security trustee report projected that the OASDI trust fund would be exhausted by 2035 (with some generous assumptions). As you may know, last year’s Medicare trustee report projected that the HI trust fund would be exhausted by 2026 (also with generous assumptions).

    Due to COVID-19, many now expect:
    – A significant increase in the population that decides to commence old age benefits earlier than planned,
    – A major dislocation in employment, and disruption in employment taxes, among younger Americans,
    – We may see a dramatic spike in SS disability income claims comparable to what we saw in 2008-2009 – a 28% increase from 2007 – 2010 (compared to say a 3% decline from 2016 – 2019).

    In my last role as a plan sponsor, I asserted from time to time that 5% – 10% of the employee population at my firm came to work each day despite the fact that they could successfully claim disability income benefits.

    We are already in a deep hole:
    – We now have 61.2 MM Americans on Medicare and growing substantially every year. While Medicare Part A is funded with payroll taxes FICA-Med, the rest, parts B and D and other programs are funded with general tax revenues (income taxes primarily).
    – We now have 75+MM Americans on Medicaid – thanks to the Patient Protection and Affordable Care Act of 2010 (Health Reform). Almost all of that coverage is funded by general revenue taxes.

    So, working Americans are already paying more, much more for other people’s medical coverage than they and their employers are paying for their own coverage.

    Keep all that in mind now that Congress showed up and approved 2 – 6 Trillion in new spending to buy your votes.
    Keep in mind how deep the debt hole already is when our idiot legislative and executive branch leadership propose more spending. Pretty much everyone expects we will see $1 – $2 Trillion deficits each and every year for the near future until such time as someone says stop.

    And, keep in mind what former chairman of the Council of Economic Advisers Herb Stein confirmed, “If something cannot go on forever, it will stop.” Others paraphrased this as “Trends that can’t continue, won’t”.

    Who gonna pay?

    So, guess what, that $18,000 average is likely to be reduced in the future, and maybe even before 2035.

    And, for those of us still employed, guess whose taxes must increase.

    Have a nice day!

    Liked by 1 person

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