Retirement Blog

Finance Blogs » Retirement Blog » Happy 78th birthday, Social Security

Happy 78th birthday, Social Security

By Jennie L. Phipps ·
Wednesday, August 14, 2013
Posted: 4 pm ET

President Franklin D. Roosevelt signed the Social Security Act into law 78 years ago Aug. 14, 1935.

More than 340 organizations nationwide are celebrating today, sharing personal stories and signing a birthday card to show support for Iowa Sen. Tom Harkin's proposal to fix Social Security's problems.

Things were different in the early years of Social Security. When the program was introduced in 1935, it was designed to help workers who were at least 65. Life expectancy at birth was 60 for males and 64 for females. The first monthly check was for $22.54, which, according to the Bureau of Labor Statistics, had the same buying power as $384.17 would in 2013.

Since then, our dependency on Social Security has grown. Social Security reports that the average worker in 2013 gets $1,257 and the average worker and spouse living in retirement receives $2,153. And we are living longer. Current life expectancy at birth is about 76 years for men and more than 81 years for women. A more relevant measure is life expectancy at 65. If you make it to age 65, a man can expect to live -- on average -- until age 84, and a woman turning age 65 this year can expect to live until age 86. Nearly 25 percent of 65-year-olds live past age 90, and 10 percent live beyond 95. The upshot is that Social Security is strapped.

A recent survey by the nonpartisan National Academy of Social Insurance found that most Americans support fixing the program as well as strengthening it. The survey showed that more than 70 percent of adults in every age group approved of this package of retirement planning changes and improvements:

  • Eliminate the cap on payroll taxes for Social Security -- currently $113,700 a year -- so all workers and employers pay on total earnings.
  • Raise the wage tax on both workers and employers from 6.2 percent of earnings to 7.2 percent. A worker earning $50,000 a year -- and the employer paying him -- would each pay about 50 cents a week more, the academy calculates.
  • Raise Social Security's basic minimum benefit so that someone who paid into Social Security for 30 years can retire at age 62 and receive a benefit that puts his income above the federal poverty level.
  • Adjust Social Security's cost-of-living, or COLA, formula to the CPI-E for elderly, which reflects increases in health care costs.

The academy says this package of changes would eliminate Social Security's projected shortfall and provide enough additional funding to pay for these improvements.

I grew up in a family where Social Security was considered a gift from above -- or as my Aunt Sissie used to say, "Franklin Delano Roosevelt sits at the right hand of God, and Harry Truman's on his left."

She died a few years ago at 94, still grateful for Social Security and the pension she had earned working as a matron at what is now known as the Federal Prison Camp Alderson in West Virginia. She was a tough old bird who didn't have any use for slackers, but I think she would have looked kindly on these proposals because we pay for them throughout our working lives. Our payments ensure that working people of all income levels have a shot at comfort and security in their old age -- and disability insurance if they are unable to work earlier than that.

Social Security is a good deal -- one worth celebrating and preserving.

Bankrate wants to hear from you and encourages comments. We ask that you stay on topic, respect other people's opinions, and avoid profanity, offensive statements, and illegal content. Please keep in mind that we reserve the right to (but are not obligated to) edit or delete your comments. Please avoid posting private or confidential information, and also keep in mind that anything you post may be disclosed, published, transmitted or reused.

By submitting a post, you agree to be bound by Bankrate's terms of use. Please refer to Bankrate's privacy policy for more information regarding Bankrate's privacy practices.
James S. Klich II
August 22, 2013 at 1:17 pm

Social Security in Charlotte, North Carolina tried to fake my boyfriends death. This is Federal fraud! They are trying to steal $1,500.00 from me and my boyfriend. Are they going to give the money to a straight person. Steal from gay men and give to the straight children!

August 16, 2013 at 5:24 am back all money plus inte and interest due on T NOTES to baby boomers..1,4 Trillion $$$$$$$$$$$$$$$$$$$$$$$$$.!!!
Then all those Senators and Repetitives in Washington DC including the President get only what the average Joe gets on Social Security ...
No more million dollars pension and freeze those all ready getting them..
They all can be forced to pay for Oboma care...And get food stamps if they qualify .....Live altogether in Washington DC in subsidied housinglike the projects housing like Chicago in the 60's...

August 16, 2013 at 5:07 am

PS...I apologise for the miss spelled words...on these comments phone will not let me correct the miss spelled words...

August 16, 2013 at 5:01 am

1.4 Trillion dollors pluse the interest has to be paid back to the Social Securty fund that the baby boomers have paid into...????
This here would stop any short fall and keep Social Securty solvent for the baby boomers...
And right now they are calling our Social Securty payments a Federal Benifit!!!!??
Why....we paid into this with our own money!!!.. It is a retirment fund...backed by T notes to be aid intwrest on wich congress has not yet...
So if you look at my other comment regarding government salarys and their million dpllare plus pensions freez...
This would get the budget/deficit balanced and keep Social Securty solvent for all generations...
Also...if congress pays China back and pays the interest on their T bills and not purs that would be Treason on the American people!!!
So congress!!! I suggest you make good on the 1.4 Trillion dollars first before you try to cut the funds that we are entitled too.!!!!
Your all over paid !!!! Take a 95% pay cut of your annal salrey and no million dollare pensions untill the deficite is paid and a balance budget...
And all those right now getting their million dollare pensions freez...
just give them what the average jle gets on social securty too untill their is no

deficite....Defer all that salery and wages pensions money to to the deficit Now!!!

August 16, 2013 at 4:28 am

First of all congress should get the complet budget balanced...
They should have all goverment employs...Reps and Senatores work for Free....untill the whole defict is balanced...And no Million dollar pensions...just what the average joe gets a month..1000.00 if that izs it..and they tp can be forced to pay for Obama care too..They can live alltogether in the prodjects subadiesed housing like the one for the poor like Johson adminastratration did..
Give them food stamps....Untill their is no deficit..and a balance budger...
This means all State governers and the reps and senators too nation wide..
A perment pensipn freez and those that have retired collecting their million odollore pensions will ceas...stop...They to will only get the average pay from Social Securty untill the budget is completley balanced....
I wonder how meny would jump ship and go into private practise....And People like Joe the plumer step in and take their places???..
So what is the nation total cost for all fifty states...This also includs city gove mayer commssionsrs