9 Facts About Social Security

9 Facts About Social Security

Social Security's been a fact of retirement life ever since it was established in 1935. We all think we know how it works, but how much do you really know? Here are nine things that might surprise you.

  1. The Social Security trust fund is huge. It is estimated to be $2.9 trillion by the end of 2020.1
  2. Most workers are eligible for Social Security benefits, but not all. For example, until 1984, federal government employees were part of the Civil Service

Retirement System and were not covered by Social Security.2

  1. You don't have to work long to be eligible. If you were born in 1929 or later, you need to work for 10 or more years to be eligible for benefits. 3
  2. Benefits are based on an individual's average earnings during a lifetime of work under the Social Security system. The calculation is based on the 35 highest years of earnings. If an individual has years of low or no earnings, Social Security may

count those years to bring the total years to 35.4

  1. There haven't always been cost-of-living adjustments (COLA) in Social Security Benefits. Before 1975, increasing benefits required an act of Congress; now, increases happen automatically, based on the Consumer Price Index. There was a coal increase of 1.3% in 2021, but there was an increase of 2.8% in 2019.5
  2. Social Security is a major source of retirement income for 62% of current retirees.6
  3. Social Security benefits are subject to federal income taxes - but it wasn't always that way. In 1983, Amendments to the Social Security Act made benefits taxable, starting with the 1984 tax year.
  4. Social Security recipients received a single lump-sum payment from 1937 until1940. One-time payments were considered "payback" to those people who contributed to the program. Social Security administrators believed these people would not participate long enough to be vested for monthly benefits.8
  5. In January 1937. Earnest Ackerman became the first person in the U.S. to receive Social Security benefits - a lump sum of 17 cents. 8
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These stats and trends point to one conclusion: The 65-and-older age group is expected to become larger and more influential in the future. Have you made arrangements for health care? Are you comfortable with your investment decisions? If You are unsure about your decisions, maybe it's time to develop a solid strategy for the future.

  1. Social Security Administration,2021
  2. Genworth.com,2021
  3. The United States Census Bureau,2020
  4. Social Security Administration,2021
  5. Employee Benefit Research Institute, 2021
  6. AARP.org, December 23, 2020
  7. 7.Statista.cqm,January 10,2021
  8. U.S. Burelū of Labour Statistics, 2020

The content is developed from sources believed to be providing accurate information.The information in the material in not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professional for specific information regarding your individual situation. The opinions expressed and material provided are for general information, should not be considered a solicitation for the purchase or sale of any security.

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