Social Security benefits should be just one element in retirement
The modest Social Security benefits increase planned for next year is a reminder this safety-net program should be just one element in a person’s retirement plan.
“Should be” is an important qualifier, however. For too many people, they are at a point in life where they have no other option to turn to.
In both Missouri and Kansas, the AARP Public Policy Institute has calculated 22 percent of the population ages 65 and older depend on Social Security for at least 90 percent of their family income.
The average individual benefit in the two states hovers between $1,305 and $1,360 a month, or between $15,660 and $16,320 a year.
This group, more than any other, needs to know Social Security is stable and benefits will grow with inflation.
This puts into focus the modest benefits bump expected for 2018.
The increase, calculated based on a government measure of inflation in urban areas, will be 2.2 percent, it has been reported.
Many will scoff at the dollar amount – about $30 a month or $360 a year – but don’t expect any of our poorest retirees to reject it.
The automatic cost-of-living increases first were implemented in 1975. Before then, benefits were increased only by an act of Congress.
Defenders of Social Security argue the change means inflation no longer drains value from the program’s benefits, which is true.
But the history of the increases – or lack of increases – points to the limitations of the guaranteed income program.
In the last 30 years, the annual adjustments have ranged from 0 percent in 2010, 2011 and 2016 to 5.8 percent in 2009. The average increase over those three decades is 2.61 percent.
It’s not the fault of the Social Security system that checks are not keeping up with household expenses. It is more probably the reality that the benefits program never was designed to fully replace a person’s pre-retirement income.
It also has become increasingly clear the program’s creators never anticipated the rise of the Internet, cell phones and a host of other near-essentials that are a given in today’s modern society, but which cost money.
Despite all of the talk of long-term solvency problems that must be addressed in coming years, the Social Security system has earned a reputation as reasonably stable and vitally important to the most financially fragile among our retiree population.
The problem is that most people require more than Social Security to live on.
- St. Joseph, Mo. News-Press