22 social security statistics that will take your breath away – The Motley Fool

Social Security has existed since 1935 and provides income to approximately 63 million Americans, of whom 42.5 million receive pension benefits.

The program is widely credited with keeping generations of seniors out of poverty – but while millions of Americans rely on social security to provide at least half of their income, most of them do not. Between us do not really understand the program.

To give you a little more information on social security, check out these 22 statistics – many of which are likely to shock you.

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Americans do not have much confidence in social security

The majority of Americans have serious doubts about Social security future, even if the program receives broad support and will be able to pay the most benefits in the foreseeable future – even if no changes are made.

• 75% Americans believe that social security will not be available when they retire. Specifically, nearly a quarter of all Americans think not at all likely they will receive a dime of the profits that they earned, while 51% think that it will not be worth it. is only somewhat likely that social security will provide a monthly income.
• 77% Americans do not think the government will do what it takes to make sure that they will be able to benefit from financial security in retirement. Only 23% are either confident or confident that they will be able to count on Uncle Sam.
• 64% of current workers do not believe that social security is likely to be a major source of income at retirement; a surprisingly low number as approximately 1 in 5 US workers has no retirement savings.
• 73% of seniors responding to a 2017 survey supported the increase in social security taxes, while less than a quarter expressed support for raising the age of retirement.
• 75% of current benefits will still be payable in 2034, when the Social Security Trust Fund is expected to be in deficit. Retirees should expect to receive at least three-quarters of the current benefits until 2092.

Politicians generally do not cut programs with such support, especially when much of that support comes from seniors, who are one of the most reliable. In summary, social security is probably safer than you think

But we are too confident in the length of our work

While underestimating the longevity of social security, Americans overestimate the duration of their professional life. .

• 70% of current workers think that they will claim social security benefits at age 65 or later.
• 61% Americans think that they will need to work after age 65 because social security will not pay enough to take care of their needs. They are right that you can not live on social security alone, but they are overly optimistic about the length of the benefit period.
• 43% of current retirees claimed benefits at age 65 or later. But the median age at which workers claimed benefits was 62 in 2017 and 63 in 2018.
• 30% is the amount by which your monthly social security benefit will be reduced if you ask at age 62 when you are supposed to retire at age 67.
• 24% is the amount by which your monthly benefits will increase if you ask at age 70 when you are supposed to ask at age 67.

Working longer and delaying your claim will result in higher monthly income. If you are forced to leave the job market sooner, it is best to have savings to support you so that you do not have to claim social security. You should also check if you may be entitled to social security rather than claiming retirement benefits immediately.

And too confident about benefit coverage

Americans also believe that Social Security will provide them with more income than – and they significantly underestimate the portion of their profits that is likely to be affected to health expenses.

• 53% of future retirees think that social security will pay at least half of their retirement expenses. An even larger share of recent retirees – 6 out of 10 – think that at least half of their necessary costs will be covered by social security.
• 40% of pre-retirement income is the amount of income that social security benefits are actually meant to replace.
• 64% of the average monthly benefit for a senior claiming social security at 62 could be spent on health care expenses.
• 20% is the amount of their benefits that future retirees expect to pay for health care.
• 5.5% is the projected annual increase in health expenditures from 2017 to 2027. Increases in the cost of living of social security should be only 2.6% per year – and could be weaker, since it was less than 2 years ago. % in four years out of five between 2012 and 2016.

It is important to have money earmarked for health care because married couples may need $ 370,000 to cover the costs of care as elderly people.

We also do not know how benefits work

Although social security is a major source of income, most people close to retirement age do not understand how it works or plans to maximize their benefits.

• 67% of pre-retirees claim to know how social security works. But the real data show big gaps in their knowledge.
• 91% Americans aged 50 and over do not know what factors determine the maximum amount of social security benefits they may receive.
• 86% of pre-retirees aged 55 to 61 do not know how much they will receive personally in social security benefits. Of the pre-retirees, 26% had no idea of ​​the amount of monthly benefits – compared with only 14% who were aware of the amount they would receive.
• 74% of pre-retirees do not know their full retirement age, nor the age at which they can retire to receive their standard benefits.
• 65% pre-retirees do not realize that you have to apply for social security benefits about three to four months before you want benefits to begin. Nearly 1 out of 10 early retirees actually think the Social Security Administration will contact them – which will not happen.
• 38% of workers think that if they claim benefits sooner, their benefits will automatically increase when they reach the retirement age. This does not happen, and any reduction in the benefits of early filing lasts during retirement.
• 23% of workers say that they focused on maximizing social security benefits when they decide when to claim their retirement income from the SSA. This means that nearly 8 out of 10 of us do not make strategic choices regarding a primary source of retirement income.

Social security benefits will surely be paid, at least in one form or another, at the time of retirement – no matter how old you are by reading this. It's time to start learning how to optimize them. You can start with these answers to five key questions of social security.

Now You Know Much More About Social Security

Now you know a lot more than most Americans about social security benefits. inspire you to save more and be smarter about how you apply for Social Security so that you can maximize benefits without relying too much on that income to fund your retirement.