Keep Social Security strong for future generations

By Teresa Holt, AARP Alaska State Director

Social Security plays a crucial role in supporting retirees and ensuring financial stability for many Alaskans. One in seven Alaska residents (107,982 people) receive the Social Security benefits they’ve earned through a lifetime of hard work. These guaranteed payments remain stable throughout retirement, unlike investments tied to the stock market or employer-based decisions. These funds are a primary income source for most retirees and inject more than $1.7 billion into the state’s economy every year.

In Alaska, the average monthly payment for retired workers is $1,485. Nearly 30,000 Alaska residents (32% of Alaskans 65 and older) depend on Social Security for at least half of their income. Eleven thousand Alaskans (12% of Alaskans 65 and older) rely on Social Security for at least 90% of their income. These payments are calculated based on your highest 35 years of earnings and the age when you (or your dependent) start collecting Social Security.

The largest group of recipients in Alaska are the 79,077 retired workers, who account for 73% of all Social Security recipients in the state. Alaska also has 11,362 residents who receive Social Security disability income. An additional 17,543 family members receive Social Security income based on the earnings of a deceased beneficiary.

Social Security plays a vital role in our state’s economy, adding $1.7 billion annually. This substantial sum is spent on essentials like groceries, gas, and property taxes. Social Security payments also play a major role in reducing poverty. Between 2018 and 2020, Social Security lifted 23,000 Alaskans aged 65 or older out of poverty. In fact, without Social Security, 29.4 percent of the state’s residents 65 or older would be living below the poverty line.

With all these benefits, why are people concerned about Social Security? Unless there are changes in the law, the Social Security trust funds will be depleted by 2035. Social Security benefits would be reduced by 20%. This situation highlights the importance of addressing Social Security’s financial sustainability to ensure that future generations receive the benefits they deserve.

Social Security’s projected shortfall arises from several factors including:

· The Baby Boomer generation is retiring, leading to a significant increase in the number of people receiving Social Security benefits. This demographic shift puts pressure on the system.

· People are living longer, which means they receive Social Security benefits for a more extended period. While this is positive in terms of longevity, it also strains the program financially.

· There has been a decline in birth rates, resulting in fewer workers paying into the Social Security system. With fewer contributors, sustaining the program becomes challenging.

The responsibility for fixing Social Security’s financial challenges primarily lies with the U.S. Congress. Legislative action is critical to ensure the program’s stability and protect it for future generations. Public support for Social Security is overwhelming. According to an AARP survey conducted in 2020, 90% of Democrats, Republicans, and Independents expressed their support for the program.

It’s essential for each of us to communicate with our members of Congress, urging them to address Social Security’s financial issues. For more articles and information about Social Security and potential reforms, you can visit https://www.aarp.org/retirement/social-security/info-2022/benefits-current-status-future-stability.html or search “AARP preserving Social Security for future generations.”