Did you know, presently, about 65.7 million people collect some form of Social Security benefit? Research tells us that approximately sixty-two million people receive regular retirement benefits while Security Disability Income, also known as SSDI, is paid to an additional 8 million people.
You also may not know that Social Security originated as a retirement program. Today’s Social Security system, however, provides much more than most retirement programs. Persons other than retirees receiving benefits can include, but not be limited to, the disabled, spouses and dependents of persons who receive Social Security, widows, widowers and children of deceased workers. Thus, depending on the circumstances, a person may be eligible for Social Security at any age.
The contributions from the Social Security tax presently paid by in excess of 168 million employees are sufficient at this time to pay for the benefits received by the retired and disabled workers, and still create a reserve. Several years ago, however, Congress recognized that the pay-as-you-go Social Security system could be insufficient in future years. The main reason was that the program now needed to fund the increased demand for benefits brought about by the increasing number of retired workers.
Let us explain further by sharing important facts from Social Security. In 1950, the ratio of workers to beneficiaries was 16 to 1. Times have changed. Presently, there are 2.7 workers for every Social Security beneficiary. By the time the Boomer generation attains full retirement age, this ratio could be 2.1 workers for every 1 beneficiary. By 2030, the Baby Boomer generation is expected to double the number of retirees receiving Social Security benefits.
In recognition of these demographic changes, Congress passed legislation a few years ago intended to respond to this increasing demand for retirement benefits. The legislation increased “full retirement age” for workers born in 1943 or later from age 65. Full retirement age now caps at age 67 for workers born after 1959. Thus, Baby Boomers have to wait longer to receive their regular age-related old-age Social Security benefits.
You may be asking how younger workers can obtain early benefits. The Social Security Administration shares specific information. It will only determine an eligible worker to be disabled when he or she lacks the ability to do any substantial gainful activity by reason of any medically determinable physical or mental impairment. This is not all though. This physical or mental impairment must be expected to result in death or which has lasted, or can be expected to last, for a continuous period of not less than twelve months.
We know this article may raise more questions than it answers for you. It is important for you to understand this benefit whether you are receiving it now, or planning for your future retirement. We encourage you to ask us your questions and schedule a meeting with our experienced legal team.