About Social Security
By Jim Bauer
@porwest (78759)
United States
February 3, 2023 9:50am CST
Social Security is something offered to workers in the United States when they retire to help them through their retirement years when they no longer have a paycheck coming in.
But there are a lot of misconceptions about what it actually is and what it is intended to provide, and because of that, a lot of retirees find themselves in a less than desirable position financially.
Social security is NOT a pension, nor is it intended to be your primary source of income.
This is important.
Social security was never, and is NOT intended to be enough to live on.
This is also important.
Social security is not designed to be a replacement of income. It is designed to be a supplement that augments other retirement income derived from pensions, 401k plans, savings and investments.
Granted, this information does no good for anyone who is already collecting benefits who has misconstrued what social security is. It is information that will only be helpful to anyone working now who will collect benefits in the future.
Why this information is not front and center and made clear to people is beyond me. Because it is very important for people to understand what they are actually getting and what it is for.
Beyond that, I think it is important when anyone gets their annual statement of benefits to examine it closely, and look at the amount they tell you that you will get in retirement when you collect.
Because the number is clear. There is no mystery about how much. When someone sees that number they should immediately ask themselves, "Is that going to be enough?"
If the answer is no, the time is now, while you are still working, to offer yourself other sources of that future needed income that social security does not, and will not, and is not supposed to provide.
14 people like this
12 responses
@LeaPea2417 (36500)
• Toccoa, Georgia
3 Feb 23
@porwest That's good that you are writing about this. Yes, diversification is key.
1 person likes this
@porwest (78759)
• United States
3 Feb 23
@LeaPea2417 What prompted me to do it is after reading several posts over the years and hearing comments about it not providing enough to seniors. I thought it might be helpful to the younger people here to understand what social security is now and have the time to make change, or even for anyone currently collecting to understand where they went wrong.
It won't help THEM. But maybe they can pass it along to their children and grandchildren and save them from similar hardships later in life.
Who knows? It's worth a shot.
@just4him (307027)
• Green Bay, Wisconsin
3 Feb 23
I really wish someone had told me about Social Security while I was working. They only threatened us that it would be gone by the time I was old enough to collect it. They're still threatening that it will run out.
If I had my life to do over again, I would make certain I understood about money.
2 people like this
@just4him (307027)
• Green Bay, Wisconsin
3 Feb 23
@porwest Thankfully, the insurance company I'm with covers my meds so I don't need to choose between food and meds. They also have an OTC card that covers healthy food. So, that is a great bonus for my wallet every month. Especially since I don't eat junk food.
1 person likes this
@porwest (78759)
• United States
3 Feb 23
This is exactly why I spend so much time writing about money. The earlier one starts, the better off they become.
I do think social security needs to be much more informative when it comes to explaining to the American people EXACTLY what it is, and exactly what it isn't, so that people can have a better opportunity to plan better for the future.
Nothing pains me more than thinking of seniors, living in what are supposed to be their golden years, struggling financially and having to choose between food or meds, having thought that social security was something it is not.
1 person likes this
@FourWalls (62429)
• United States
3 Feb 23
Let’s call social security what it is: a Ponzi scheme. What I paid in didn’t go to “my retirement,” it went to pay the people who were already retired. And the people who are paying today are paying my retirement. You just can’t indict the federal government the way you can Enron.
2 people like this
@porwest (78759)
• United States
7 Feb 23
A Ponzi scheme is a very DIRECT and LITERAL definition of what it is. Because all a Ponzi scheme is, is taking from new investors to pay old investors. And in order to keep it going, you always have to keep getting new investors.
The word "trust fund," as it applies to Social Security would be ILLEGAL if anyone else used the term without actual funds allocated to the TRUST.
But it's the government. They can do whatever they want and say whatever they want and call it whatever they want.
1 person likes this
@moffittjc (118546)
• Gainesville, Florida
3 Feb 23
I always look at that number closely on the annual statement they send out. I add that to what I will receive from my pension, 401(k), and 457 plans, and it gives me a pretty good idea of what I can expect at retirement.
1 person likes this
@moffittjc (118546)
• Gainesville, Florida
9 Feb 23
@porwest Sadly, it seems most of the people in this country are flying by the seat of their pants.
1 person likes this
@porwest (78759)
• United States
10 Feb 23
@moffittjc All indications point directly to that. I don't know how we fix it. I mean, I have some ideas, like teaching money management in schools and the government being more direct about what things are...
But that may all be wishful thinking.
1 person likes this
@lovebuglena (43081)
• Staten Island, New York
5 Feb 23
Sometimes people's pensions are very low and social security benefits are not enough either. And how does the 401k work? Can you just take all the money out of it once you retire? Do you pay taxes on it?
1 person likes this
@lovebuglena (43081)
• Staten Island, New York
17 Nov
@porwest When is the best time to withdraw the 401k?
1 person likes this
@porwest (78759)
• United States
16 Nov
I think the key takeaway is that people need to actually be AWARE of what their retirements will actually look like, and plan accordingly. Ask the questions about whether it will be enough BEFORE they reach that destination in their lives. It would save a lot of people a lot of pain if they did.
As for 401k's, they are tax deferred, meaning you do not pay any taxes on the contributions or gains until you withdraw them. The proceeds are taxed as regular income. After age 59 1/2 you can withdraw all or portions without incurring any penalties.
1 person likes this
@porwest (78759)
• United States
18 Nov
@lovebuglena It depends on the individual and how savvy they are. For most people the best time to withdraw it is when they are fully retired. Whatever age that is, beyond the 59 1/2 of course. For most people I would recommend taking it out with regular monthly withdrawals based on a specified period of years one expects to live. Unless someone is really good with their money, if most people took out the whole amount in a lump sum, they'd blow through it rather quickly and it would be useless.
1 person likes this
@aninditasen (15746)
• Raurkela, India
4 Feb 23
In most countries whether social security or pension, it's not enough to run your life comfortably after retirement. So you have to have other sources of income after retirement.
1 person likes this
@aninditasen (15746)
• Raurkela, India
5 Feb 23
@porwest People know that but all don't know how to invest. I too didn't know. I have started learning now from my bank and have started investing.
1 person likes this
@porwest (78759)
• United States
9 Feb 23
@aninditasen As I always say, there are books galore. People can spend lots of time learning to knit mittens. Why not learn how to invest and grow their money? lol
1 person likes this
@RebeccasFarm (86831)
• United States
3 Feb 23
I do just fine with my social security..it is more than enough for me at this time.
1 person likes this
@RebeccasFarm (86831)
• United States
5 Feb 23
@porwest I know how to manage well.
1 person likes this
@porwest (78759)
• United States
6 Feb 23
@RebeccasFarm So long as you are comfortable and happy, that is all that matters. The moment you find you are struggling or making too many compromises, that's when it sinks in for most people. Not that anyone can do anything about it once that time comes. But it is when it happens.
And then it just is what it is.
I can't help those for whom it is too late. I can only help those for whom there is still time to prevent it.
1 person likes this
@LindaOHio (157041)
• United States
3 Feb 23
People definitely should check their SS statements. I found an error on mine.
1 person likes this
@porwest (78759)
• United States
3 Feb 23
People really should. But I think it is more important to know that it is not supposed to be your only source of income. It was never intended to be that. Many people think it is unfortunately.
As a result, many seniors suffer the consequences at a time in their lives when they are supposed to be happily retired.
1 person likes this
@florelway (23160)
• Cagayan De Oro, Philippines
3 Feb 23
Absolutely correct. Some colleagues of mine who retired at 60 went back working again because the pension is not enough to sustain the lifestyle they were used to. So some went on to become consultants and teachers. I will be retiring soon God willing and I expect to get a pension half of what I am receiving now so I wish I can do some teaching jobs or just continue saving in my cooperative and manage money properly and spend less.
