Managing Social Security Benefits to Avoid Future Impoverishment for At-Risk Populations in the U.S
Tauheed, Morrine, Forum on Public Policy: A Journal of the Oxford Round Table
In the wake of the imminent retirement of the "baby-boomers", combined with the increase in life expectancy overall, concerns with the quality of life is become increasingly as (or more) important than the quantity of years. Future retirees are seeking financial security, freedom (and resources) to travel or to engage in some type of leisure activity, to invest, and to leave legacies for loved ones. They do not expect to become a financial or social burden for their families due to a lack of good planning or unrealistic expectations. The United States, as well as other developed countries in the global community, is tasked with maintaining the health, livelihood, and general well-being of all of its members, and in particular its aging population. The most well-known and applicable retirement program in the United States is Social Security.
The topic of Social Security in the United States has garnered widespread attention in recent years, and has been discussed in regards to solvency and privatization, and in terms of "saving" Social Security. The prediction for the future of Social Security has been (at best) that Social Security will continue to exist, though barely functional.
The Social Security Act, signed into law on August 14, 1935, was a reaction to the Great Depression, was a broad-based social insurance agent designed to address some of the difficulties brought on by the Great Depression, which was characterized by mass unemployment, the disruption or loss of pensions by thousands of workers, and the loss of lifetime savings by many. Two main issues were old-age insecurity and unemployment. Other insurance programs set up by the Social Security Act included unemployment insurance, workers' compensation, veterans' disability compensation, armed forces and civil service pensions.
Title I of the Social Security Act provided for a federal-state program of public assistance for older people called "Old Age Assistance". It was for the aged poor, regardless of employment history. Title II of the Act set up a national social insurance system to provide pensions for retired and disabled workers. In 1939, survivors of workers were added.
Old--Age (retirement), Survivors, and Disability Insurance (OASDI)--popularly referred to as Social Security is administered by the Social Security Administration and is a Title II program that bases benefits primarily on an individual's own contribution to the insurance system, not on economic need. OASDI provides monthly benefits to workers and their families when earnings stop or are reduced because the worker retires, dies, or becomes disabled. (SSA Congressional Statistics, December 2006).
Social Security was set up as a safety net for retired workers at age sixty-five (65) and their families, and designed to replace approximately forty percent (40%) of the worker's average income. Currently, Social Security pays benefits to closely 32 million workers and their families. The median monthly benefit amount in 2006 was approximately $989.50. Over 90% of Americans have family members who rely on Social Security for income and healthcare benefits (SSA, 2006).
In 2006, single persons with a total annual income of $9800.00 (or $816.67 per month) or less, were considered at or below the poverty line. Sources indicate that more than one in ten Americans (10.1%) were below 100% of the poverty line in 2006 (DHHS, March 2007). For certain groups, identified as high-risk, the percentage is much higher. The poverty rate of African-Americans over age 65 overall is more than 1 in 5 (23.2%). For African-American women over age 65, the rate is 25.2%, or more than 1 in 4.
Overall, for all ethnic groups with the exception of Asian-American women, the poverty rate for women is significantly higher than for men. According to the National Academy of Social Insurance (August, 2000), elderly women comprise almost 70% of the poor elderly in the United States. …