Wednesday, October 09, 2013
Bank of America and Merrill Edge offer a half-hour video on the future of Social Security
The webcast explains the long term outlook for Social Security.
One-third of the beneficiaries of Social Security are not retired, which means that these must be on the disability program. That would mean that your FICA taxes support this disability insurance also, so not all of your FICA contributions would support an earned retirement “annuity” if politicians look at it that way.
If you take Social Security at age 62, you get about 75% of full retirement age benefit for life, which means it results in diminished lifetime payments at about age 78. If you can wait to age 70-1/2, you get 132%. 43% of beneficiaries start at 62, and about 75% start early.
If you reach age 70, a male has a slightly less than 50% chance of reaching age 92, a female slightly more.
Social Security has an actuarial information page here.
Merrill Edge has a website with this video and others, here.
The video explains that Social Security can pay 100% of promised benefits until 2033, but then would have to cut down to 75% of benefits. It talks about various ways to improve FICA tax collections, and reducing outlays by raising retirement ages or increasing the number of years of work experience evaluated.
The video mentions the idea of a total economic collapse at one point, as the only event that could stop Social Security payments to current beneficiaries (who would include disabled as well as retirees).