#147. Baby Boomers and Social SecurityPosted on
It was all over the news last week. Kathleen Casey-Kirschling, a retired teacher from New Jersey, was the first Baby Boomer to apply for Social Security retirement benefits. She is the first of an estimated 10,000 Boomers every day who will become eligible for benefits beginning in January 2008.
Since over 50% of our staff at Agracel qualifies as a Baby Boomer, we thought we would look into some facts about Social Security. Here’s what we found:
*Social Security is the major source of income for most of the elderly.
* Social Security benefits represent 41% of the income of the elderly.
* Among elderly Social Security beneficiaries, 21% of married couples and about 43% of unmarried persons rely on Social Security for 91% or more of their income.
*Social Security provides more than just retirement benefits.
* Retired workers and their dependents account for 69% of total benefits paid.
* Disabled workers and their dependents account for 17% of total benefits paid.
* About 91 percent of workers age 21-64 in covered employment and their families have protection in the event of a long-term disability.
* Almost 3 in 10 of today’s 20 year-olds will become disabled before reaching age 67.
* 70% of the private sector workforce has no long-term disability insurance.
* Survivors of deceased workers account for 14% of total benefits paid.
* One in seven of today’s 20 year-olds will die before reaching age 67.
* About 97% of persons aged 20-49 who worked in covered employment in 2005 have survivors insurance protection for their young children and the surviving spouse caring for the children
An estimated 163 million workers, 96% of all workers, are covered under Social Security.
- **52% of the workforce has no private pension coverage.
- **31% of the workforce has no savings set aside specifically for retirement.
*By 2032, there will be almost twice as many older Americans as today — from 38 million today to 72 million.
But more importantly to most Baby Boomers, is the statistic that the ratio of workers paying Social Security taxes to people collecting benefits will fall from 3.3 to 1 in 2006 to 2.1 to 1 by 2032. There will not be enough workers to pay scheduled benefits at current tax rates. Within 10 years the program will begin paying more in benefits than it collects in taxes. By the time the youngest Baby Boomers turn 76 in 2041, the Social Security trust funds will be exhausted.
Many options are being explored by our government leaders. Providing greater incentives for people to save for retirement is advisable. Additional or expanded programs like the 401(k) would help minimize the role played by Social Security for millions of future retirees. Changes are necessary to strengthen Social Security for generations to come. The sooner, the better.