This week, the Social Security and Medicare Trustees issued their annual report to Congress, affirming that Social Security is sound and in no immediate danger. Rather, the program continues to run large surpluses in spite of the economic downturn. The Trustees project that Social Security will be able to pay full benefits until 2037, four years earlier than the last projection. The report further shows that rapidly rising health care costs threaten Medicare’s solvency as early as 2017, confirming that health care is the crisis, not entitlements. The report has sparked renewed calls for action to address these issues.
Dr. Alicia Munnell, director of the Center for Retirement Research, wrote a commentary piece this week, “Social Security Healthier than Your 401(k)”. The piece focuses on the importance of Social Security and its exceptional functionality in comparison to the private retirement system and is a great realistic argument about plausible minor changes to Social Security to increase its longevity.
For so many elders across the country, Social Security is a steady source of income they can count on. In Minnesota, nearly 20% of elders depend on Social Security as their sole source of income, as cited in the state’s Elder Economic Security Initiative™ policy brief: “Elders Living on the Edge: When Meeting Basic Needs Exceeds Available Income in Minnesota”. In New Jersey, more than 25% of elders receive Social Security as their only source of income, as cited in the New Jersey Policy Brief. Social Security alone is not enough for elders to make ends meet, but without it as income, some elders would have nothing. According to the national Elder Economic Security Standard™ Index, Social Security provides on average about 60% of the income need by a woman to achieve economic security when living mortgage free. With the three legged stool of retirement – Social Security, pension and private savings – dissolving, more and more seniors are relying on Social Security alone in retirement. At WOW, we hope the adequacy of Social Security in retirement to meet basic need can receive equal policy attention as solvency receives.
Social Security is still a bedrock government program that continues to pay out benefits to 35 million retirees and their spouses on time each month. Given the latest news of its solvency will no doubt continue to increase discussion about changing the program sooner rather than later to maintain its effectiveness. As Congress begins deliberating more seriously about the issue, we hope they will take into account the vital role Social Security plays in the lives of elders, and also realize that Social Security alone does not make our elders economically secure.