In the spirit of the season, here are 12 reasons to give thanks for Social Security:
- Without Social Security, millions of people would be in poverty. “For the elderly, Social Security single-handedly slashes poverty by 75%,” according to the National Bureau of Economic Research.
- Social Security provides a big chunk of most retirees' income. According to the Social Security Administration, 21% of married beneficiaries amd 44% unmarried ones get 90% or more of their income from the program, while 48% and 69%, respectively, get 50% or more of their income from it.
- It’s really easy to qualify for Social Security benefits. You only need to work for a decade and earn roughly $5,500 (in 2019 dollars) per year.
- Social Security lets you start collecting early. No matter what your full retirement age is, you can choose to start collecting your benefits as early as age 62 or as late as age 70. The most common age to start collecting benefits is actually 62.
- Social Security lets you enlarge or shrink your benefits. While it might seem like you have little control over the size of your Social Security benefit checks, you can actually make your ultimate check bigger or smaller depending on when you choose to start collecting.
- Social Security doesn't penalize you for starting to collect early. The system is designed so that total benefits received are about the same no matter when you start collecting if you live an average-length life. Checks that start arriving at age 62 will be considerably smaller, but you’ll receive many more of them.
- Social Security allows a do-over. Choosing when to start collecting your benefits can be tough, and you may find yourself regretting your choice soon after you make it. Social Security is forgiving in this regard, allowing you to change your mind—as long as you do so within 12 months of starting to collect your benefits and pay back all the benefits received so far.
- Social Security supports more than just retirees Disability and survivor benefits help many people avoid financial disaster. The Center for Budget and Policy Priorities has noted that “For a young worker with average earnings, a spouse, and two children, [survivor benefits are] equivalent to a life insurance policy with a face value of over $725,000 in 2018.”
- Employers contribute substantially to Social Security. You may not like forking over 6.2% of your paycheck every pay period to the Social Security program, but be thankful that your employer is coughing up the other 6.2%.
- Social Security aims to keep up with inflation. Another blessing in the Social Security system is that benefits are designed to increase in step with inflation through annual cost-of-living adjustments (COLAs), so retirees can maintain the same quality of living today as they will in twenty years.
- As good as it is, the program can be made even stronger. There’s a lot of hand-wringing in the media about the looming demise of Social Security, but it’s not going anywhere anytime soon, though. The program does face some challenges, but Congress can strengthen or weaken it. One worst-case scenario has retirees ending up with about 75% of the benefits they were expecting, which would be painful, but still leaves some significant income.
- It's a great example of efficiency. Social Security is a massive program with a budget of roughly $1 trillion, but it's also an impressively efficient one, spending only 0.6% of that budget for administrative expenses.
You can find the full article at The Motley Fool.