While a majority of the population is covered by Social Security (SS) to some degree, many do not fully understand the program, resulting in frustration and confusion when it comes time to receive benefits. In an effort to curb miscommunication or misgivings, the Social Security Administration (SSA) has increased its informational output in recent years. The SSA’s 2017 fact sheet provided numerous statistics for future and current recipients, and we’ve outlined the top stats below.

  1. There are 171 million individuals covered by Social Security
    • To qualify for benefits, you must “earn” 40 work credits in your lifetime, with the ability to collect up to 4 credits annually (valued at $1,300 per credit)
  2. 71% of recipients are retired workers (in 2017)
    • SS payouts accumulate 8% from ages 62 to 70, so if you’re close to retirement, a great way to boost your payout is to wait to enroll
  3. The remaining 29% of benefits will go to the disabled and survivors
    • In 2017, approximately 16% of benefits will be received by disabled workers and the remaining 13% goes to survivors of deceased beneficiaries
  4. In 2017, 62 million Americans will receive $955 billion in benefits
    • Funding is acquired from 3 sources: interest on the program’s asset reserves, a 12.4% payroll tax on all earned income and the taxation of the benefits themselves
  5. 61% of seniors rely on their SS benefits for at least half their monthly income
    • 48% of married seniors and 71% of unmarried retirees depend on Social Security for at least half their income
  6. Of unmarried seniors, 43% rely on benefits for about 90% of their income
    • Close to half of single seniors look to Social Security to provide the majority of their income each month
  7. Most 65 year olds will live approximately 20 more years
    • In 1960, the average life expectancy was 70, but it has since increased to 79, which means it is wise to factor in a longer lifespan since the program is only intended to account for 40% of wages in retirement
  8. By 2035, the senior population is set to grow by 65%
    • Currently, those 65 and up number 48 million people, but the impending retirement of many baby boomers means that number could grow to 79 million over the next 18 years
  9. By 2035, the worker-to-recipient ratio will decline by 21%
    • Presently, the worker-to-beneficiary ratio is 2.8-to-1, but experts estimate that ratio could drop to 2.2-to-1 in the next 18 years
  10. In the event of a long-term disability, about 90% of workers have protection
    • While 67% of the private workplace does not offer long-term disability insurance, Social Security covers approximately 90% of workers ages 21 to 64 in the event of a work ending disability
  11. Of workers ages 20 to 49, about 96% do have protective insurance for survivors
    • Since one in eight 20 year olds won’t live to see age 67, at least the majority of those who work in covered employment have survivors protection insurance for surviving spouses and children
  12. One third of workers report having nothing set aside for retirement
    • With a potential 23% cut in benefits in 2034, the fact that 31% of the current working population has no money set aside, leaving them fully reliant on Social Security, is less than promising

In conclusion, although Social Security will be around for the long run, and likely covers more income than many believe, it would be wise to find secondary funding for retirement since Social Security was never intended to serve as your principal source.

Daniel Kittell, CPA