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AARP AARP States Texas Finances 50+

As Social Security Turns 88, Texans Are Counting On The Benefit

Bob Murray of Austin woke up Aug. 1 at 6 a.m. as he normally does and went about his regular routine of taking a walk and chatting with his wife. But there was something very different about this morning for the 67 year old. It was his first day of retirement from a career of working since the 1970s.

Come January, Murray expects to begin drawing down Social Security to supplement his other retirement income. He leaves an information technology job at the Employee Retirement System of Texas where he worked for nine years, focused on the tools that helped his colleagues work at home during the pandemic. He previously held jobs with the University of Texas at Austin (UT) where his expertise in computers blossomed.

“When I started at UT, I didn’t realize I’d be there 25 years, but I knew Social Security was something building in the background and I also knew it wouldn’t be enough to live on and that I needed other strategies,” said Murray. “So, we’re counting on it (Social Security), but we’re pretty much blessed that we don’t have to count solely on Social Security. It’s not enough in most cases.”

Eighty-eight years ago on Aug. 14, 1935, President Franklin Roosevelt signed into law the Social Security Act creating the social insurance program that consists of retirement, disability and survivor benefits.

Social security cards

More than one in seven Texas residents – over 4.4 million people – receives Social Security benefits. These payments inject more than $72.8 billion into the state’s economy every year. The largest group of beneficiaries in Texas are its more than 3 million retired workers who account for about 70 percent of all Social Security beneficiaries in the state.

Trying to understand Social Security can make anyone’s head spin. AARP has many resources to help you understand the program, including a Social Security Resource Center and there are many myths to debunk about the program.

But one thing is clear: Social Security is funded by almost all of us. Current workers and their employers pay into Social Security through payroll deductions. The payroll deduction is a part of the FICA tax. Employers and workers each pay a tax of 7.65% — 6.2% is for Social Security and 1.45% is for Medicare.

Social Security has proven steadfast and strong. Not only is it the largest source of income for most retirees, but it also has never missed a monthly payment since it cut its first check to Ida May Fuller in 1940. Still, many Americans are anxious about its health. A 2020 AARP poll showed that 57 percent of Americans are not confident in the future of the program.

According to the 2023 annual report of the Social Security Board of Trustees, the surplus in the trust funds that disburse retirement, disability and other Social Security benefits will be depleted by 2034. That does not mean Social Security will no longer be around; it means the system will exhaust its cash reserves and will able to pay out only what it takes in year-to-year in Social Security taxes. If this comes to pass, Social Security would be able to pay about 80 percent of the benefits that retired and disabled workers have earned.

To avoid any shortfall, Congress must take action over the next decade to address Social Security’s finances – for example, by cutting benefits, raising taxes, redirecting other government revenue into the program or crafting some combination of the above.

AARP will keep fighting to ensure hard-working Americans who pay into Social Security get the money they’ve earned.

“We must keep Social Security strong,” AARP CEO Jo Ann Jenkins said earlier this year. “Americans should be able to trust that our leaders will safeguard the hard-earned Social Security benefits they have paid into and earned throughout their lives. Young people should have the confidence that they will receive the benefits they’re earning now through their hard work, just as their parents and grandparents have done.”

Senior couple using laptop to pay bills at home

Throughout its 88-year history, Social Security has proven to be one of the most successful anti-poverty programs this country has ever created. Without Social Security benefits, 21.7 million more Americans would be below the poverty line, according to the Center on Budget and Policy Priorities.

Social Security lifted 1,071,000 Texans 65 or older out of poverty from 2018 through 2020. In fact. 39.3 percent of the state’s residents in this age group would be in poverty but for Social Security benefits.

A consideration when fixing Social Security is the degree to which older Americans rely on it. It’s been often cited that Social Security was meant to provide just 40 percent of your retirement income. But today, tens of millions of Americans depend heavily on the program. And already, their payments aren’t high.

In Texas, the average Social Security retired worker benefit is $1,514 per month (about $18,200 annually), slightly below the national average. The average Social Security disabled worker benefit in Texas is $1,261 per month (about $15,100 annually.)

For Bob Murray, Social Security will simply be a heavy sweetener to his retirement savings.

“We’re counting on it. And we wouldn’t want it to change or be taken away or reduced,” he said. “I don’t think it’s money that Congress should be playing with and I believe that it needs to continue. I wasn’t smart about money when I was young. So, it’s great that the government has something in place that helps us out.”

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