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5 Social Security Stats That Will Blow You Away

By Dan Caplinger - Mar 6, 2016 at 7:01AM

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The program has had a huge impact on financial security for older Americans.

Social Security has been a key part of retirement security for decades. Yet there are some facts about the program that still surprise people. Below, you'll find five statistics about Social Security that many find shocking.

More people claim at their first opportunity
More people claim Social Security at age 62, the earliest opportunity to get benefits, than any other age, according to a study of Social Security data by the Center for Retirement Research at Boston College. Among retirees, 48% of women and 42% of men don't wait any longer than necessary to take their Social Security.

The trend recently has actually shifted away from claiming at age 62. As recently as 2005, those taking benefits at 62 made up 55% to 60% of all retirees. As the Baby Boomers have moved into retirement, those numbers have started to go down, indicating a different way of thinking about Social Security.

Few people wait beyond full retirement age to claim
By contrast, only a small number of people wait beyond their full retirement age to take benefits. According to the Boston College study, just 10% of women and 9% of men took benefits later than their full retirement age. Only 4% of women and 2% of men waited until age 70.

Waiting beyond age 70 to claim rarely makes sense because delayed retirement credits stop accruing at 70. However, with bonus payments of 8% per year on your benefits by waiting beyond full retirement age as late as age 70, there's an incentive for waiting that offsets part of the downward impact of receiving fewer monthly payments during your lifetime.

The majority of retirees get most of their total income from Social Security
Most people know that Social Security plays a big part in providing retirement income, but few realize just how important it is. Among married couples, 53% get at least half of their income from Social Security. For unmarried people, the figure is much higher, with nearly three-quarters getting the majority of their income from the program.

An alarming number of people rely almost entirely on Social Security. Among unmarried people, nearly half get 90% or more of their income from the program. For married couples, the figure drops to 22%, but that's still a huge number of retirees who wouldn't be able to survive without Social Security.

Knowing the pure financial aspects of the Social Security decision is important, but it's not determinative by itself. You also have to be able to apply your own facts and circumstances to come up with the best answer for you and your family.

Social Security tax rates have risen sixfold since the 1940s
When Social Security first began, the amount of payroll tax withheld from worker pay was just 1%. But in the 1950s, the tax rate started going up, reaching 5% by the early 1970s. Since then, subsequent increases have raised the rate to 6.2%, where it has stayed for a quarter-century.

Some believe that further increases would help shore up the Social Security system. The latest trustees report suggests that a rise in the tax rate to 7.5% would ensure solvency for at least the next 75 years. Many workers will oppose any increase in taxes without corresponding benefit increases.

The worker-to-retiree ratio has plunged
One stress on Social Security is the fact that the number of retirees has risen sharply compared to the number of workers supporting benefit payments through payroll taxes. In the 1940s and 1950s, the ratio of workers to retirees started out high, as relatively few people were enrolled in Social Security but the worker numbers were fairly steady.

In 1950, 16.5 workers supported every beneficiary. By 2015, that number had fallen to 2.8. Moreover, the trend is continuing, and by 2035, only 2.1 workers will support each beneficiary. That will put further strain on the program.

Social Security is important, but many people don't know much about the program. These stats show just how important the program is, along with some of the challenges of keeping it going indefinitely into the future.

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