9 Facts About Social Security
Ever since the establishment of Social Security in 1935, it has been a fact of retirement life. Most of us think that we know how it works, but how much do you really know? Here are nine things that might surprise you:
- The Social Security trust fund is huge. At $2.73 trillion at the end of 2014, it exceeds the GDP of every country in the world except the seven largest: the U.S., China, India, Japan, Germany, Russia, and Brazil.
- Not all workers are eligible for Social Security. For instance, until 1984, federal government employees were part of the Civil Service Retirement System and were not covered by Social Security.
- To be eligible, you don’t have to work for a long period of time. If you were born in 1929 or later, you need to work for 10 or more years to be eligible for benefits.
- Benefits are based on an individual’s average earnings during a lifetime of work under the Social Security system. The calculation is based on the 35 highest years of earnings. If an individual has years of low earnings or no earnings, Social Security may count those years to bring the total years to 35.
- There haven’t always been cost-of-living adjustments (COLA) in Social Security benefits. Before 1975, increasing benefits required an act of Congress; not increases happen automatically, based on the Consumer Price Index.
- Social Security is a major source of retirement income for 63% of current retirees.
[box title=”Fast Fact:” border_width=”1″ icon=”comment-o” icon_style=”border” icon_shape=”circle” align=”left”]In an average month, 43.3 million people over age 65 and older receive a retirement benefit from the Social Security Administration Source: Social Security Administration, 2015[/box]
source: Silver Grove Financial Group, Inc.
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