An average of 65 million Americans per month will receive a Social Security benefit, totaling over one trillion dollars in benefits paid during the year 2021.
A snapshot of a Month: June 2021 Beneficiary Data shows.
Retired workers 46.7 million $72.7 billion $1,555 average monthly benefit
Dependents 2.9 million $2.34 billion
Disabled workers 8.1 million $10.3 billion $1,280 average monthly benefit dependents 1.4 million $0.6 billion
Survivors 5.9 million $7.3 billion Social Security is the major source of income for most of the elderly.
Nearly nine out of ten people age 65 and older were receiving a Social Security benefit as of December 31, 2020. ο Social Security benefits represent about 30% of the income of the elderly.
Among elderly Social Security beneficiaries, 37% of men and 42% of women receive 50% or more of their income from Social Security.
Among elderly Social Security beneficiaries, 12% of men and 15% of women rely on Social Security for 90% or more of their income.
This information is from research released in 2021 using 2015 data. See this link for more information Social Security provides more than just retirement benefits.
Retired workers and their dependents accounted for 75.2% of total benefits paid in 2020.
Disabled workers and their dependents accounted for 13.1% of total benefits paid in 2020. About 89 percent of workers aged 21-64 in covered employment in 2020 and their families have protection in the event of a severe and prolonged disability. Just over 1 in 4 of today’s 20-year-old will become disabled before reaching age 67.
67% of the private sector workforce has no long-term disability insurance. Survivors of deceased workers accounted for 11.7% of total benefits paid in 2020. More than one in eight of today’s 20-year-olds will die before reaching age 67.
About 96% of persons aged 20-49 who worked in covered employment in 2020 have survivors’ insurance protection for their children under age 18 (and surviving spouses caring for children under age 16). An estimated 176 million workers will work in OASDI-covered employment in 2021.
45% of the workforce in private industry has no access to private pension coverage. Two-thirds (66%) of workers report they are currently saving for retirement. Having an employer-sponsored retirement savings plan is a key factor in whether Americans save for retirement. Only 18% of those without access to an employer-sponsored plan said they have any retirement savings.
In 1940, the life expectancy of a 65-year-old was almost 14 years; today it is just over 20 years.
The number of Americans 65 and older will increase from about 57 million in 2021 to about 76 million by 2035. 1
There are currently 2.7 covered workers per each Social Security beneficiary. By 2035, there will be 2.3 covered workers for each beneficiary.
What does this mean to the average person heading into their later years of life?
Life always throws curveballs at us.
When we were younger, we thought we had a life-time in front of us. As we grew older, we found time creeping up. Seems every 10 years or so, something hits us. Either the Dot.com bust, housing crisis, Black Mondy, companies going broke and our pensions wiped out or the always present inflation. Seems costs of things just keep going up and up.
Next thing we know we are in our 50s, 60s or even 70s, and we have not saved enough for retirement. What do we do?
Most retirement models are set for saving while young.
Bankrate recommends the following:
Set realistic goals. First item for consideration: your savings and investments thus far. …
But when you are already living paycheck-to-paycheck how to you consider your savings and investments. That is fine when you have money in the bank. But what about those of us with less than an optimal amount saved?
Tackle debt. …
Here are some options to look at when you do not have large extra income to “sock-away”
- Review your budget to boost saving and trim debt. …
- Save in an emergency fund so you can avoid unexpected debt. …
- Save for retirement to get the minimum match from your employer. …
- Set some debt-reduction goals that help you. …
- Tackle “expensive debt” first.
You will need to make some hard decisions now in order to live comfortably later. That may mean holding off on:
- Taking that cruise
- Buying a new car, if the old one will do just as good
- Buying new furniture
- Eating out (boy this one can take a chuck out of your weekly budget)
Take advantage of catch-up contributions. …
Workers 50 and older can contribute $6,500 more to 401(k) plans than younger workers.
The tax deduction you can claim on these catch-up contributions could save you over $1,000 on your annual tax bill. Here’s how to take advantage of 401(k) catch-up contributions. The 401(k) Catch-Up Contribution Limit for 2022
Workers can defer paying income tax on as much as $20,500 that they contribute to a 401(k), 403(b) and the federal government’s Thrift Savings Plan in 2022. Once you turn 50, you become eligible to make additional catch-up contributions of up to $6,500 to your 401(k) plan, for a total of $27,000 you can temporarily shield from income tax.
The tax advantage of making catch-up contributions can be huge. If a worker over 50 who is in the 35% tax bracket contributes the full $27,000 to a 401(k), he will reduce his current tax bill by $9,450, an extra $2,275 in tax savings.
A worker in the 24% tax bracket who contributes the same amount would save $6,480 in taxes, $1,560 more than younger workers. Income tax won’t be due on the money in your 401(k) plan until it is withdrawn from the account. And if you drop into a lower tax bracket in retirement, you will pay that lower rate on 401(k) distributions.
Create a health savings account. …
Is an HSA good for older adults?
The funds in an HSA can be used to cover major health events. However, that will detract from their earning potential. People who are young and healthy can use an HSA like a retirement fund, but those who are older and those with greater health needs might not see much benefit
IRS Announces 2021 Limits for HSAs and High-Deductible Health Plans
Contributions and Out-of-Pocket limits for Health Saving Accounts and High-Deductible Health Plans are:
HSA contribution limit (employer + employee) self-only $3,600, family $7,200
HSA Catch-up contributions (age 55 or older) $1,000
Make the most of Social Security. …
Know the ins-outs of Social Security benefits. This includes what you estimated payouts would be for any age your thinking of retiring at.
The amount of your Social Security payments depends on your earnings history and the age you sign up for benefits. You may be able to boost your Social Security payments by waiting until an older age to start collecting Social Security. Continuing to work, even after retirement, and earning a higher salary can also raise your Social Security benefit amount. Married couples have the additional option of collecting spousal payments, which can also increase Social Security income.
You need to work at least 35 years. If you reach retirement age and have not worked 35 years, each additional year will be counted as zeros, and could affect the amount of money you receive. If you work more than 35 years, might boost your payments.
Earn more can set you up to earn more in retirement. There is a max on amount social security will use to calculate your benefits. Maximum earnings up to $147,000 in 2022 are used to calculate social security retirement benefits. Earning above $147,000 are not taxed by social security and thus not used to calculate retiree monthly benefit payments.
Work until full retirement age or beyond. By working to or beyond your normal retirement age (NRA) gather higher monthly payments. For each year your delay receiving benefits after NRA, increase your monthly payment by estimated 8% per year.
There are additional ways to take full advantage of social security. The social security administration has tools to help you understand your benefits. Take advantage at https://www.ssa.gov/
Generate income beyond investing. …
Start a service business. Businesses like dinner catering, freelance writing or online marketing are a few examples. There are so many ways to create income without large sum of money to invest.
How about sharing your expertise? You were successful while working. You can take that skillset and turn it into extra cash. My wife was a nurse for 30 years. Now in retirement she works for a health, pharmaceutical and personal care company, which enhancing the lives of everyone using non-toxic products. She does this through referring customers to the company online store.
A lot of people leverage Amazon as another online store where you can refer people to and receive payment for referrals.
Rent out unused space in your home. But it’s not just about renting out your spare bedroom or basement on Airbnb. Rent out your car on Turo and bike to work or carpool instead.
Ever thought of hosting an event. How about starting your own event planning business? Sites like Eventbrite or All-City Events or meet-up are ways to get the word out on hosting an event.
You can make money hosting events without aiming for thousands of sign-ups, vendors and high-profile guest speakers. Instead, form a free Meet Up group on a topic you’re knowledgeable about, like growth hacking, and run free events.
After you secure a loyal following, charge for an event with a reputable guest speaker. Rent out a small, upscale conference room at a nearby hotel, and grow your new Meet Up by hosting exclusive, sought-after events that charge a premium for fantastic content.
Teach others what you love to do. Do you skydive, scuba dive, wood working, or other hobby? Turn your hobby into a way of making money.
The thing to do is do something. Instead on sitting around doing nothing, then worrying about the outcome. Make a change. Take a chance, what do you have to lose except some time and who knows you might find that niche which secures your financial future.
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