Planning for retirement before Social Security mainly involved having a large family to take care of you when you were too old or ill to work.
Governments have tried poor laws and other loosely coordinated programs to help the elderly and the destitute for millennia.
SSA Processing of Payments
However, families, communities, charities, and churches handled the majority of the financial help for the elderly, the poor, and those persons who couldn’t take care of themselves.
The Social Security Administration estimates that 65 million people received monthly benefits from Social Security in 2020, serving as the cornerstone of retirement for the majority of Americans (SSA).
About 49 million of them, or the majority, were retirees and their families, but the program also supports disabled workers, families who have lost a parent or spouse, and other vulnerable groups.
If you haven’t started cashing checks yet, you probably already contribute to the pot. There are 180 million Americans who contribute to Social Security through taxes.
In fact, the program is so widely used that you will always be identified by your Social Security number, which the SSA assigns to you at birth.
READ MORE: Social Security Numbers You Need To Know That Could Impact Your Benefits
A consequence of Claiming Social Security Payment Early
READ MORE: Social Security Update: Don’t Miss the Deadline on December 7 for Your Medicare Enrollment
The average worker loses approximately $182,000 in lifetime discretionary income by filing for Social Security too soon, according to the analysis, making the penalty for doing so extraordinarily high. The majority of Americans may utilize this money as many of them don’t have enough savings to support themselves in their later years.
A quarter of Americans apply for Social Security at age 62, and approximately half do so before they reach full retirement age, according to Social Security Administration statistics.
One of the study’s co-authors and a professor of economics at Boston University, Laurence J. Kotlikoff, told CBS MoneyWatch that Americans need to modify the way they think.
Given that the average life expectancy for adults 65 and older is 83 years for men and 85 years for women, some people choose to apply for Social Security early. A better generalization is to think about what Kotlikoff and his co-authors refer to as the worst outcome, financially speaking: surviving to one’s maximum age of life, which may be in the upper 90s or even 100 years old.
The basic line is that we can’t bet on dying on time, according to Kotlikoff, a retirement expert at Maximize My Social Security and co-author of the Social Security program handbook Get What’s Yours.
Instead, he suggested that Americans employ financial techniques that will enable them to put off taking Social Security, increasing their overall disposable income.