What To­day’s Work­ers Can Ex­pect From So­cial Se­cu­rity To­mor­row

The Sentinel-Record - HER - Hot Springs - - Page Turners -

Did you know that the age at which many work­ers will qual­ify for full So­cial Se­cu­rity ben­e­fits has risen to 67 from 65? If that’s news to you, you’re not alone: The ma­jor­ity of work­ers are still in the dark about So­cial Se­cu­rity el­i­gi­bil­ity re­quire­ments and many ex­pect to qual­ify for ben­e­fits pay­ments sooner than they ac­tu­ally will. Com­bined with lin­ger­ing ques­tions about the long-term fi­nan­cial health of the over­all So­cial Se­cu­rity pro­gram, these facts re­in­force the im­por­tance of un­der­stand­ing ex­actly what you might ex­pect from So­cial Se­cu­rity dur­ing your re­tire­ment.

Ben­e­fit Ba­sics

The ex­act amount of your So­cial Se­cu­rity ben­e­fit will de­pend upon your earn­ings his­tory. Ac­cord­ing to the So­cial Se­cu­rity Ad­min­is­tra­tion (SSA), your ben­e­fits will be there for you when you re­tire. How­ever, the SSA also ac­knowl­edges that some changes to the present sys­tem may be re­quired. For ex­am­ple, when So­cial Se­cu­rity was cre­ated, the av­er­age life span was less than 65 years. But to­day, many peo­ple are liv­ing longer, health­ier lives. And be­cause the na­tion’s 76 mil­lion baby boomers are ap­proach­ing re­tire­ment, there will be nearly twice as many older Amer­i­cans in 30 years as there are to­day. 1

What’s in Store?

Ide­ally, So­cial Se­cu­rity takes in more in taxes each year than it pays out in ben­e­fits. But in 2010, ac­cord­ing to es­ti­mates by the SSA, cur­rent taxes were not enough to pay sched­uled ben­e­fits and ad­min­is­tra­tive ex­penses. Based on SSA pro­jec­tions, by 2036, the So­cial Se­cu­rity trust fund will be ex­hausted and pay­roll taxes col­lected will be enough to pay only about 77% of ben­e­fits owed. Recog­ni­tion of these is­sues is grow­ing, and leg­is­la­tors are now look­ing at fund­ing and in­vest­ment op­tions to re­solve them. While your So­cial Se­cu­rity ben­e­fits are an im­por­tant piece of the re­tire­ment in­come equa­tion, you prob­a­bly shouldn’t plan to rely on So­cial Se­cu­rity alone for your fu­ture in­come. Your em­ployer-spon­sored re­tire­ment sav­ings plan, com­pany pen­sion, and per­sonal sav­ings may need to pro­vide the ma­jor por­tion of your in­come in re­tire­ment.

For More In­for­ma­tion

If you’d like to learn more, please contact Richard Pay­ton at 501.624.5215 or richard.pay­[email protected]

1Source: So­cial Se­cu­rity Ad­min­is­tra­tion, Fast Facts & Fig­ures About So­cial Se­cu­rity, 2011.

Ar­ti­cle writ­ten by McGraw Hill and pro­vided cour­tesy of Mor­gan Stan­ley Smith Bar­ney Fi­nan­cial Ad­vi­sor Richard Pay­ton

Richard Pay­ton As­so­ciate Vice Pres­i­dent Fi­nan­cialAd­vi­sor 4262 Cen­tralAv­enue,Suite A Hot Springs,AR 71913 501-624-5215

CRC# 390307 10/11 A Mor­gan Stan­ley Com­pany

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