By Trisha Miller
Last year, over $888 billion dollars went to Social Security payments in the US. About 40 million retired workers received benefits averaging $1,342 dollars per month. 28.6% of folks 65-74 were still in the workforce in 2012. Studies approximate that by 2022 that number will rise to about 31%. Why are seniors planning on working so late in life? The sheer fact that their benefits are disappearing before their very eyes.
Depletion of Social Security Funds
The Pew Research Center compiled information that says all government Social Security funds are predicted to be depleted by 2034. Included in this fund are the disability-insurance fund and the old-age and survivors’ fund. The disability fund is projected to run dry by this year or next year. Yes, that is correct. One such fund is almost completely depletetd. The second fund has been forecast to empty sometime around 2031 and 2035. Meeting somewhere in between, the Pew Research Center has settled on an estimated date of 2034.
After these Security funds are extinguished incoming tax revenue will be able to account for about ¾ of scheduled tax benefits. In order to continue fulfilling retirement payouts, the government will have to make some changes. This could mean raising the maximum taxable wage, increasing payroll, goods & services taxes, or altogether changing the way we formulate Social Security fund benefits.
Financial Health of an Elderly Person
A little under $1,500 dollars per month comes in at just over $16,000 dollars per year. That is less than half of the national US average household income. The average senior citizen over 65 is still looking at about $50,000 dollars of debt. So, how exactly are people expected to pay off their housing, credit card, and loan debt on a mere $1,500 dollars per month?
Well, it seems that they are not. People at 65 really have only 3 options when it comes to financially stability later in life. Social Security, retirement funds, and remaining in the workforce. Demise of the first two options and an inability to remain working means some folks will have to look elsewhere in order to have their basic needs, like food, met.
Nutrition is a SNAP
According to the USDA, as of October 2015, those who are elderly or disabled making up to $3,250 are able to apply for the SNAP (Supplemental Nutritional Assistance Program) program. This program distributes funds to those in need of financial assistance, but only for the purchasing of food. Not counted in the allotted $3,250 per month are Supplemental Security Income, Temporary Assistance for Needy Families, and most retirement (pension) plans.
This means that any elderly person (over the age of 60) may take advantage of such assistance in addition to monthly government aid and retirement funds. Some states, such as California, offer their residents other means of compensation for food. So, the SNAP benefits are not offered in that particular state. If this is something you or a loved one would like to look into, please bear that in mind and check your local information before beginning the application process.
While, it’s not uncommon to see folks in their early to mid 60s working, the fact of the matter is that this steep decline in Social Security benefits equates to older people being forced to work into their 70s. Many financial professionals believe that policies will change and elderly individuals will not be allowed to withdraw state pension funds until after the age of 70 or higher. Those who are unable to work may be stuck in an unsavory situation. The amount of Americans dependent on supplemental benefits like food stamps and SNAP continues to rise. Undoubtedly due to the fact that elderly folks can no longer pay for their own comfortable retirement. Unfortunately, there may not be another option for American elders in order to simply survive.
Trisha is a freelance writer from Boise, ID. She is a dedicated vegan who promotes an all-around healthy lifestyle – including financial health. You can follow her on twitter @thatdangvegan and check out her blog thatdangvegan.com.
I believe we are going to go back to multi generational families, living in the same home. Because it is getting harder for everyone to afford even an average standard of living.
My 86 year old mother is living with my 66 year old sister, because there is no way she could make it on her $800 per month Social Security.
I have a $20,000 military pension and when I start SS in 22 months at 62, my $13,700 benefit will mean I will have more monthly income than I have ever had in my 62 years.
I do not know how people with just SS income will make it.
Many people just do not realize that there are plenty of workers that have never made more than $30,000 per year their entire working life, many a whole lot less. But, we cannot afford to raise the minimum wage????