Social Security - what's in it for me?

By Ashley Aitken

YES…. We have all heard that “Social Security will not be there” for future generations. “It’s unreliable, losing money, and going bankrupt.”; “It’s only for the elderly, why do I need to pay into it, I’m only in my 20s.” Well, it’s because it is one of the best programs you can invest in!

Since its creation 80 years ago this August, Social Security is the most successful and effective income source in our nation’s history for seniors in retirement, disabled workers, surviving spouses, and children of deceased workers. It’s also an economic engine, adding about $1.4 trillion to the national economy in 2012. The program’s funding comes directly from its beneficiaries (workers) through a regular payroll tax, the Federal Insurance Contributions Act, better known as FICA.

And these taxes come back to the states. In Oregon for example, Social Security kept 183,000 seniors out of poverty and helped Oregonians keep or find 131,000 jobs. It is estimated that each dollar paid in benefits generates nearly two dollars in spending by individuals and businesses, adding about $18.97 billion to Oregon’s total economic output.

Despite it’s popularity, success, and economic value to the country, there are still naysayers who try to convince the younger generation the program will not be there for us. Why is that? Historically, Social Security has collected more money than it has paid out in benefits. For the past few decades, there have been roughly three workers for every beneficiary. The extra money from the additional workers was placed in a trust fund that has been collecting interest. As boomers retire, Social Security benefits are expected to exceed contributions beginning in 2027. The Social Security trust fund is projected to have resources to make full payments until the end of 2033. After that, unless changes are made, there will still be sufficient resources to pay over 75 percent of scheduled benefits from FICA taxes.

Five reasons why Social Security is relevant for young people:

1. Disability Insurance: If you become injured or develop a medical condition that renders you unable to work, you may be eligible for Social Security disability payments. According to the SSA “Almost 3 in 10 of today’s 20-year-olds will become disabled before age 67.” Young people who have worked and paid Social Security taxes for as few as two years can be eligible for disability payments.
2. Survivor’s Insurance: Social Security provides income for families of workers who die, including your widow or widower, your unmarried children under the age of 18, a spouse caring for your children, and your dependent parents if they are age 62 or older. The Social Security Administration estimates that about 1 in 7 people currently age 20 will die before age 67.
3. Help Support your Parents and Grandparents: When parents and grandparents get a Social Security payment, they are less likely to need help from younger family members to support themselves. In 2012, a total of 94 percent, or 757,029, of older Oregon residents received Social Security, with an average annual benefit of $15,074.
4. Money during Retirement: Social Security payments continue for your lifetime, despite the number of years you live, and the benefits will include a cost of living adjustment if there is inflation. Benefits are calculated on an average of your highest 35 years’ salary in the workforce. Workers born in 1960 or later can collect the “full benefits” at the age of 67. If you collect it early, your full benefit payments are reduced. The longer you delay your start date, the higher your monthly benefit until the age of 70.
5. Reliable Source of Income: Just like 37 million seniors today who benefit from Social Security, millions of young Americans also benefit from the program and millions more will rely on it in the future when they are no longer able to work.

The truth of the matter is that Social Security offers a guaranteed and safe benefit, unaffected by the ups and downs of the stock market. It is viable. It is sustainable. And it will still be a strong program for me, for my generation, and for the generations to follow.