Social Security is a common topic in client discussions. Some people are worried that’s all they’ll have to live on in their retirement years. Others are convinced it won’t exist by the time they’re retirement age, so they want to create financial plans that don’t include Social Security income.
In honor of the upcoming 86th anniversary of the Social Security Bill being signed into law – August 14, 1935, for those who wondered – here are some things you might not know about Social Security, and one important recommendation.
Social Security isn’t going broke
It’s a pay-as-you-go system where workers and employers pay payroll taxes, according to a recent AARP article. As long as there are workers and employers paying into the system, there will be funds in it. However, after decades of surplus building, the system now pays out more than it takes in because the retirement population is growing faster and living longer than the working population. It is projected that the surplus will run out in 2035.
“Even then, Social Security won’t be broke,” the article states. “But it will only have enough to pay 79 percent of scheduled benefits, according to the latest estimate.”
Congress can address this by taking measures such as increasing payroll taxes and raising the retirement age.
Benefits vs. Life Expectancy
You’ve probably heard that when Social Security was created, it was done so that few people would collect the benefits because the life expectancy wasn’t age 65. Here’s the truth: The life expectancy at birth in 1930 was 58 for men and 62 for women, due to high infant mortality rates, according to the Social Security website. However, most people who made it to adulthood could expect to live to 65, and most who did collected social security benefits for 13 or more years.
More than 40,000 people have claimed a single social security number as their number
This number was issued to Hilda Schrader Whitcher, a secretary at a wallet manufacturing company in Lockport, NY, according to an article at The Motley Fool.
“A vice president at the company decided to illustrate their wallets’ utility by using a sample Social Security card,” the article stated. That sample card used Whitcher’s actual Social Security number and was inserted in wallets that went on to be sold in department stores all over the nation. The Social Security Administration corrected more than 40,000 earnings reports attributed to her number through the years.
Social Security Has Lists of the Most Common Names in Use in the US
If you’re interested in knowing the top baby names for the past 100 years, visit the Social Security site’s Baby Names section. Liam and Olivia were the top names for boys and girls in 2020, respectively. If you need proof of how popular culture affects naming trends, take a look at how the use of “Karen” has changed in recent years.
You should create a “My Social Security” account for yourself
When was the last time you checked your Social Security benefits? Ensuring that your contributions are accurately recorded means you are paid appropriately when it’s time to collect Social Security. A “My Social Security” account allows you to view your contributions to the program, US News reports, along with a host of other useful information:
• Check your earnings record
• Get an estimate of your future Social Security payments
• Find out how much you will qualify for if you become disabled
• Determine what family members will receive if you die
• Keep your account up to date by changing your address or direct deposit information
• Request documentation, such as a replacement Social Security or Medicare card, or benefit verification letter
Set up your account here.