Why do so many senior citizens get so little in Social Security?

Question

My parents are retiring soon and I was worried if they'd have enough money to live off of because all I hear about is how little social security pays out. When I looked over their paperwork however, they're getting a pretty good amount plus my dad gets a pension. Growing up we were middle class, they never earned that much but now they're gonna get almost $40,000 a year in SS plus pension, plus 401K.

Answer 1

Benefits are based on earnings. Most seniors were just ordinary working people. Many of us didn't make much more than minimum wage. Salaries weren't what they are now. I made what I thought was a pretty good living. I was a single parent and raised three children. My best year was $28,000. Most years were 20 to 22. My benefit, if I took it now would be $900 and something. I'm waiting. I am getting by on my widow's pension and a small pension from the Retail Clerks union. It's less than my own SS, but if I can hold out it will be better when I reach 66 yrs. old. When they do give a cost of living raise it is off set by the increase in medicare cost. Young people blame us for not having enough to live on. They say we should have saved and invested. We lived payday to payday. There was no IRAs, no retirement plans at work. We paid in to Social Security and thought that would be all we needed.

Answer 2

Your parents were smart. Social security is based on your income during the best thirty (I believe the number is 30) years of income, and when you start collecting it. The earlier you collect it (age 62), the less you get; if you wait until you are 70, you get more. But regardless of how much or how little you get, having "enough" money has to do with one's spending and saving habits. By age 65, most people should have their house paid off, and should have put money aside in a 401K, IRA, or other savings plan. Over thirty years of saving small amounts of money, that money grows tremendously. However, many young people unfortunately don't start saving early, buy bigger and bigger houses instead of paying off what they have, and don't have enough money when they are older. Of course, there are unfortunate circumstances where this is not possible, but I believe there are more circumstances where it is possible to save and plan for a good retirement. So learn from your parents, put money in a retirement plan (most companies match some percentage of 401K contributions which is a great benefit), and get your house paid off by the time you retire so you won't have that expense when you are older.

Answer 3

What a person draws in SS depends on what he/she pays in. When I started to pay into the system wages were very low and the max you paid in per year was actually only $44. Of course, as time went on that amount went up to account for the higher wages but those low contributions at the start would end up hurting you when it became time to retire. You simply didn't have as much paid in as a person that started contributing 20 years later. If it were not for the pension I am drawing, the SS payments that my wife and I draw would be less than the poverty level of today. Your parents income will be eaten away by inflation as the years roll by just as mine has been by the governments unfair methods of calculated cost of living adjustments. We got a COLA of 2.3% this year where as inflation was actually 4.5%.

Answer 4

1. Social Security is meant to be a supplement in retirement. Not the whole of one's retirement income.
2. The system depends on contributions from those in the work force to continue paying out the benefits. The average retiree who had average income in the work force uses up every dime in his account by 67 years and six months of age.
3. The real crunch is coming because the "baby boomers" who will reach retirement age are the largest generation every born in the U.S. and they had one of the lowest reproductive rates.
4. Another drain on the system has been the annual cost-of-living allowance added to the check. At one time it was added twice a year.

Answer 5

They are in good shape.

Unfortunately, not everyone is....

Personally, instead of being able to set aside a lot of savings, I took care of my mother for 15 years. She was unable to work and had dementia. She required a lot of doctors care and medication. While SocSec and SSI took care of her meds and most of her housing, I picked up the slack at the place where she was living, bought all of her clothes, shoes, undies, paid for her shoes, haircuts and the other "living" things she needed....When her costs went up, Medicare wouldn't pay all of the increase, so I did.

Anyway, I don't regret a dollar of it. I take pride that I was able to make my mothers descent into madness a little more comfortable for her...until her death 4 years ago.

I get a decent SocSec and had a little put away which I am using to enjoy my retirement now. Watching my mother fade away taught me a very valuable lesson; life is way too short to sit around worrying....so I don't.

Fortunately, I enjoy very good health and take no prescription medication. Someday, however, something will "get" me - it is the natural order of things. Until then, I am flying through my wonderful life with chocolate in both hands and a smile on my face. Whatever is in my future, I will face it with dignity and (hopefully) grace.

Answer 6

They are better off then a lot But if they lived in my state they would have a hard time making ends meet on $40,00 a year.
When these seniors were in the work force the wages were much , much lower then they are now so not much was paid in to be drawn on at retirement.

Answer 7

How much or little from SS is immaterial, what needs to be considered is the many programs that milk the system without any contributions --- Good for your parents, ALL of us on social security don't draw as much (we didn't put in as much either more than likely -- unless there's a Senator or Congressman in your family (one of many SS free rides))

Answer 8

For me, I was seriously injured when someone broke into my home and tried to kill me. I had a fractured neck and spine. I healed., Later down the road, I had lots of problems due to those injuries. I applied for disability. SS based my income on the last 10 years of working. Those 10 years included going back to nursing school and when my husband had a stroke, I stayed home to care for him since we had no insurance and I cold not have afforded to pay someone come and stay with him while I worked. So they based my income on the 7 years I did work in those 10 years, so it is less than it should have been

Answer 9

SS is not ment for sole support..your parents were wise enough to save for retirement and take advantage of a 401K.
My husband and I did the same thing and we are living quite comfortably..but we made sure we paid ourselves first each payday..sometimes it was a struggle, but it has paid off now..we retired 9 years ago..

Answer 10

Social Security will pay (when you retire) according to credits---during working years a certain amount goes into your social security account, this will influence the amount you get once retired. Those who choose not to contribute to social security will get nothing or a very small amount.