"Every day the increasing weight of years admonishes me more and more,
that the shade of retirement is as necessary to me as it will be welcome."
-- George Washington, Farewell Address
A Franklin-Templeton survey in 2014 found that the vast majority of not-yet-retired folks -- 72%, in fact -- are looking forward to retirement. That's not surprising, but the degree to which most of them will rely on Social Security for critical retirement income probably is at least eye-opening, if not shocking.
Here are a big bunch of interesting, astonishing, and/or impressive statistics related to Social Security. Knowing some of them might actually lead you to greater future financial security and more income in your retirement.
Stat No. 1: 90%
Close to 90% of people aged 65 and older collect Social Security benefits.
Stat No. 2: 173 million
About 173 million people are covered under Social Security.
Stat No. 3: 33%
A full third of the income of elderly Americans is made up of Social Security benefits.
Stat No. 4: 90%
According to the Social Security Administration, 21% of married elderly Social Security beneficiaries and 43% of unmarried ones get fully 90% or more of their income from the program.
Stat No. 5: 50%
About 50% of married elderly Social Security beneficiaries and 71% of unmarried ones get 50% or more of their income from Social Security.
Stat No. 6: 22.1 million
According to a recent report from the Center on Budget and Policy Priorities, without Social Security income, 22.1 million Americans would be poor. That's rather meaningful, considering how low the official poverty line is. For 2017, the federal poverty level was $12,060 for individuals and $16,240 for a family of two.
Stat No. 7: 41.5%
It's estimated that, for people aged 65 and older, 41.5% of them would be living in poverty without Social Security vs. 10% with Social Security.
Stat No. 8: 69
The normal (or "full") retirement age for Social Security -- the age at which you're eligible to start collecting your full benefits -- used to be 65, but it has been increased for many of us. For those born in 1937 or earlier, it remains 65; for those born in 1960 or later, it's 67; and for those born between 1937 and 1960, it's somewhere in between. There's a decent chance the full retirement age will rise again, as some Republican lawmakers have pushed to hike it to 69.
Stat No. 9: 62
Even if your full retirement age is 67, though, you can choose to start collecting your benefits as early as age 62.
Stat No. 10: 70
You can also delay starting to collect your benefits beyond your full retirement age -- until age 70, if you want.
Stat No. 11: $955 billion
Social Security pays close to 62 million Americans about $955 billion in benefits annually.
Stat No. 12: 5%
The annual sum of $955 billion that Social Security pays out makes up a hefty 5% of our country's entire gross domestic product (GDP) -- which was $18.6 trillion in 2016.
Stat No. 13: 72%
You may think of Social Security as solely a retirement program, but only 72% of the benefits it pays out are retirement benefits. Another 16% goes to disabled workers and their dependents, and 13% goes for survivor benefits.
Stat No. 14: 40
In order to qualify for Social Security benefits based on your earnings, you need to collect 40 credits, with a credit representing earnings of at least $1,300 (as of 2017) within a year, with up to four credits earnable per year. Thus, most of us can qualify simply by working for a decade and by earning at least $5,200 per year, as of 2017.
Stat No. 15: 35
Meanwhile, the formula that the Social Security Administration uses to calculate your benefits is based on your earnings in the 35 years in which you earned the most money (adjusted for inflation). So it's rather valuable to work a full 35 years. If you only earned income in 28 years, the formula will be incorporating seven zeros, which will shrink your benefits.
Stat No. 16: 40%
Social Security retirement benefits are designed to replace about 40% of your pre-retirement income, if you earned an average income. That percentage is higher for lower-income folks and lower for higher earners.
Stat No. 17: $1,370
The average monthly retirement benefit was recently $1,370. That amounts to $16,440 per year. If your earnings have been above average, you'll collect more than that -- but not a whole lot more.
Stat No. 18: $2,687
The overall maximum monthly Social Security benefit for those retiring at their full retirement age was recently $2,687 -- or about $32,000 for the whole year.
Stat No. 19: $3,538
You can collect even more than that if you earned the maximum wages on which the government collects Social Security payroll taxes and if you start collecting at age 70. In that case, the most recent maximum monthly benefit was $3,538, or $42,456 for the year.
Stat No. 20: 8%
You can make your ultimate retirement benefit check bigger or smaller than what you'd get if you started collecting at your full retirement age -- by starting to collect earlier or later. For every year beyond your full retirement age that you delay starting to receive benefits, you'll increase their value by about 8% -- until age 70. So delaying from age 67 to 70 can leave you with checks about 24% fatter.
Stat No. 21: 7%
That works in reverse if you start collecting early. For every year before your full retirement age that you start collecting, your benefits shrink by about 7%. So if your full retirement age is 67 and you start collecting benefits at age 62, they will be 30% smaller.
Stat No. 22: $0
The stats above might have you thinking it's stupid to start collecting your benefits early, but it's not. That's because the system is designed so that total benefits received are about the same -- a difference of $0 -- no matter when you start collecting, if you have an average life span. Checks that start arriving at age 62 will be considerably smaller, but you'll receive many more of them.
Stat No. 23: 12 months
A little-known fact about Social Security is that it offers a do over. You have a year from whenever you start collecting your benefits to change your mind -- which might happen if you land a great job soon after retiring. You can essentially undo filing for benefits by submitting Form SSA-521 and also paying back all the benefits you've received.
Stat No. 24: 12.4%
Employee income is taxed at 6.2% for Social Security. That figure may seem familiar from your pay stubs. What you may not realize, though, is that employers cough up a corresponding 6.2%. That's not news to self-employed people, unfortunately, as they pay both the employer and employee portions, forking over a whopping 12.4%.
Stat No. 25: 85%
Social Security benefits are generally not taxed. But if your income passes a certain level while you're receiving Social Security benefits, those benefits may end up taxed. No more than 85% of your benefits will ever be taxed, though.
Stat No. 26: $127,200
Someone earning $127,200 in 2017 and someone earning $3 million will pay the same Social Security tax. That's because the amount of our earnings that are taxed for Social Security is capped -- at $127,200 for 2017. Any earnings above that do not get taxed for Social Security. (Many view this as unfair, and one proposed way to bolster the Social Security funds is to eliminate this cap, or at least increase it.)
Stat No. 27: 2.8
The contributing-workers-to-beneficiaries ratio has been plunging over time. Back in 1950, the ratio was 16.5, with about 48 million workers supporting close to 3 million beneficiaries. The ratio was recently just 2.8 -- and it's expected to hit 2.2 by 2035. This is making the program in its current configuration no longer self-sustaining over the long run. Thus, many ways to cut benefits or increase income to the program are being proposed.
Stat No. 28: 75%
You'll often hear that the Social Security program will run out of money soon. That's far from the case. Between taxes taken in and interest earned on them, less benefit checks written, the Social Security trust funds have been running a surplus in every year since 1982. In 2016, that surplus was a sizable $35 billion.
Stat No. 29: 2019
Surpluses are likely to stop around 2019, at which point, the Social Security system can rely on incoming interest payments to make up the deficit -- for a while.
Stat No. 30: 0%
Don't think that the Social Security program as it is will ever pay you zero, because there's a zero percent chance of that. Remember, the program is funded by taxes. As long as workers are paying taxes to the Social Security program, it will have money to pay out to retirees.
Stat No. 31: 25%
According to several government estimates, Social Security funds are likely to be depleted by 2034 -- if no changes are made. If that happens, payment checks won't disappear, but they'll likely shrink by about 25%, according to the Social Security Administration, leaving beneficiaries with about 75% of what they were expecting.
Stat No. 32: 76%
Fortunately, changes can be made to shore up Social Security -- some more pleasant than others. Hiking the full retirement age to 69, for example, is a less popular option. Alternatively, it's estimated that fully 76% of the trust funds' shortfall could be eliminated by increasing the Social Security tax rate for employers and employees to 7.2% in 2022 and 8.2% in 2052.
Stat No. 33: 74%
Taxing all of each worker's income, instead of just the first $127,200 of it, would also wipe out much of the shortfall. It's been estimated that 74% could be wiped out by eliminating the earnings cap over a 10-year period.
Given how critical Social Security is to so many of us, it's unlikely that it will ever go away. Still, various parties are pushing for changes to the program, either to strengthen it and, perhaps, increase benefits, or to cut its costs and the benefits it pays out.
If Social Security matters to you, keep an eye on proposals, and let your representatives in Washington know what you endorse or don't want to see. And keep learning more about Social Security, because the more you know, the more money you'll likely be able to receive from the program.