Social Security: 6 Facts You Need to Know

Social Security is our most important family protection program that works not just for retirees, but also for people with disabilities and children who’ve lost a working parent. It’s a promise for all generations. People pay for this benefit throughout their working lives. Social Security is immensely popular with voters across the political spectrum, which is why those who would like to dismantle the program consistently distort the facts and falsely claim the program is “bankrupt.” It’s important for working people to know the truth about the program and push back against Social Security myths and lies and fight for more, not less retirement security.

Here are six Social Security facts you need to know:

  1. Working Families can count on Social Security for decades to come. Social Security can pay 100% of promised benefits until 2033. Without any changes, the system can pay three-fourths of promised benefits every year after that. SeeA Summary of the 2012 Annual Reports” from the Social Security and Medicare Boards of Trustees.
  2. While Social Security benefits are modest, they’re a big deal to most people. The average annual benefit paid to retired workers is about $14,800  today. Among people 65 and older receiving benefits, two-thirds of them count on Social Security for 50% or more of their income. More than one-third of them get 90 cents of every dollar of income from Social Security. See “Income of the Population 55 or Older, 2010” from researchers at the Social Security Administration.
  3. Social Security has become increasingly important because people can’t count on pensions or retirement savings. Just 15% of workers in the private sector have a real pension at work. Just 60% of families closest to retirement (ages 55 to 64) have any retirement savings at all in a 401(k), IRA or similar account. Even a $100,000 account, for a couple retiring at age 65, translates into just about $400 per month in income. See “Changes in U.S. Family Finances from 2007 to 2010: Evidence from the Survey of Consumer Finances.
  4. Raising the retirement age is a big benefit cut for all workers. If Social Security’s full benefit age were increased to 69 (from 67 today), a worker who would have gotten $12,000 a year retiring at 67 under current law would see her benefits cut by nearly $1,600 per year. See “Cuts in Retirement Benefits Resulting from Raising the Retirement Age to 69” from Strengthen Social Security.
  5. Wealthy earners don’t pay the Social Security tax on all their earnings. The Social Security contribution tax, which shows up as the OASDI contribution on your annual W-2 form, doesn’t apply to earnings above $110,100 in 2012 ($113,700 beginning in 2013). That means a $1 million earner is paying under 1% of his or her earnings to support Social Security in a typical year, compared to the 6.2% of anyone making $110,100 or less contributes. Scrapping the cap so that all earnings are subject to the payroll tax would go a long way toward closing Social Security’s entire projected 75-year funding gap. See 2012 Social Security Changes from the Social Security Administration for information on the tax cap. Also, see the Social Security Administration’s analyses of proposals by Sen. Tom Harkin (Iowa) and Sen. Bernie Sanders (Vt.) that scrap or raise the cap.
  6. Proposals to make the annual cost-of-living adjustment (COLA) “more accurate” cut benefits for today’s retirees. Changing the way benefits     are adjusted, such as by using the “chained Consumer Price Index,” actually make the COLA less accurate because it does not adequately take into       account the health care costs paid by Social Security beneficiaries. The impact will snowball for today’s retirees. By age 80, an average earner getting     the lower COLA every year in retirement would have lost $8,100 in lifetime benefits, and if she lives to 90, the total cut adds up to more than $19,000. See “Cutting the Social Security COLA by Changing the Way Inflation Is Calculated Would Especially Hurt Women” from experts at the National Women’s Law Center.

 

Retirements surge, new hires plummet

Retirements surge, new hires plummet

Oct. 15, 2012 – 08:53AM   |  By STEPHEN LOSEY

The federal government's long-awaited retirement wave is here, and it's smacking headlong into the biggest hiring slowdown in a decade.

The federal government’s long-awaited retirement wave is here, and it’s smacking headlong into the biggest hiring slowdown in a decade. ()

The federal government’s long-awaited retirement wave is here, and it’s smacking headlong into the biggest hiring slowdown in a decade.

And it’s not just retirements. Overall attrition shot up in 2011, which caused the government’s total workforce to drop by its greatest amount since the height of the government downsizing in 1999.

With no end to tight budgets in sight — and with even steeper sequestration cuts possibly on the horizon — employees worry things could break down even further. Continue reading “Retirements surge, new hires plummet”

Federal employees deserve better

Federal employees deserve better
8:30 PM, Sep. 18, 2012  |  
2 Comments

For more than two years, the U.S. population has heard that federal employees are the root cause of all of the government’s financial problems, and with less government, the budget crisis will be solved. It is time to stop allowing politicians to demonize federal employees and to thank them for the services they provide the public.

In early January 2012, the Census Bureau reported that the population of the United States was about 312,809,589 (with births, deaths and immigration; we have a net gain of one person every 17 seconds). At the same time, there were about 2,130,289 federal employees, including those who work around the world and in the U.S. territories. Thus, the federal workforce (many of whom are represented by the American Federation of Government Employees) makes up approximately 0.7 percent of the U.S. population. That 0.7 percent of the population cares for our veterans, maintains military equipment, protects our borders, ensures the food we eat is safe and works tirelessly to make our country the best that it can be. Continue reading “Federal employees deserve better”