Will I Die Before I Finally Get Those Sweet, Sweet Social Security Checks?

It would sure be nice if we could look forward to retiring in this lifetime

Social security: You’ve been paying into it your whole working life, whether you’ve wanted to or not. But it’s an incredible program — it’s kept generations of older people out of poverty, and for younger people, it’s helped clear the way for them to rise in the workforce by encouraging older workers to retire. But what age do you get social security benefits? Has it always been the same age? What about kids born now — is social security even going to be around for them? How do you know how much you’ve paid into it so far? Alongside Martha Shedden, a registered social security analyst and chartered retirement planning counselor who co-founded the National Association of Registered Social Security Analysts, we checked in on some answers.

First of all, how much money are we talking about?

Probably a lot more than you think! “People look at their statement and see a monthly amount, but don’t calculate that over 20 to 30 years of retirement,” Shedden says. “It’s really the largest asset that many retirees have. If you calculate that out, for couples, it’s over a million dollars.”

All that payroll tax I’ve been putting in adds up to over a million dollars?

Not quite! Generally speaking, your money, which goes into a thing called the Social Security Trust Fund, is going to the older people who are receiving their checks now. The rest is invested into government securities — special-issue, interest-bearing bonds that are similar to Treasury bonds, except they aren’t traded publicly. Same thing will likely happen when you begin collecting: You’ll be getting the money of people currently working, plus, in theory, money from those bonds that have been collecting interest.

Okay, so when can I start getting my checks?

People nowadays can begin claiming at age 62, but Shedden advises that you wait. You’ll earn a lot more money if you do.

Why?

You can begin collecting in part at 62, and then start collecting your full amount due around 65 for many current seniors (though it goes upward every two months depending on the year you were born — more on that in a bit). If you begin claiming any month earlier than your full retirement age, your amount is going to be lower, going down a fraction of a percent every month. But if you wait till age 70, it’s going to increase a fraction of a percent every month. That amounts to an extra 8 percent a year — and, Shedden says, the difference between collecting at 62 and collecting at 70 can be up to 76 percent! 

Why would anyone begin collecting at 62, then?

Personal circumstances. Maybe they can’t wait for the money. 

What age do you get social security benefits if you were born in the last 40 years or so?

Right now, for anyone born in 1960 or after, the full retirement age is 67. That could change, though. 

Why could it change?

Because social security is predicted to become insolvent by 2034 unless changes are made. Tweaking the ages of eligibility could help with that — among other things. Shedden said the same thing happened in 1983, when President Reagan — who liked to portray social security as government running amok — and House Speaker Tip O’Neill came together and essentially saved social security with a bipartisan solution in another deeply polarized time. It was on the brink of running out of money, and they enacted payroll tax increases in order to collect more money than they would need each year (the excess goes into the aforementioned trust fund). They also, crucially, increased the age at which people could begin collecting. So everyone born through 1954 had a full retirement age of 66 — and then for those born from 1955 to 1960, they increased the full retirement age by 2 months for every year. And everyone born in 1960 and after has a full retirement age of 67. 

We’ll need a similar kind of agreement in the next decade or so to keep the social security checks flowing. So until things change, it’s ages 62 to begin collecting benefits, and full retirement age is 67. 

Why is it so political?

Well, there’s a lot of money at stake, but Shedden points out that social security is often misrepresented in politics. “It’s referred to as an ‘entitlement,’ and that’s not correct,” she says. “We’re all paying into the program. The people receiving benefits are receiving benefits from others paying into it and from the trust fund that’s earning interest. It’s not taking away from other government spending. So it really bothers me when I hear that because that’s not the truth of it. By cutting Social Security, you’re not going to be providing more money for something else.” 

But politicians have tried, right?

Oh, sure. It should come as no surprise that George W. Bush, the self-proclaimed Decider who took a long nap while the economy nosedived into a dark place not seen since the Great Depression, desperately wanted to privatize social security in 2005. The idea was to allow people to divert a portion of their payroll tax into securities such as the stock market. That would have turned out well, as you can imagine.

Yikes. Who are the people trying to save or shrink the Social Security program?

It generally falls along ideological lines: Liberals tend to defend and propose expanding it, while conservatives tend to ideologically oppose parts of it, or propose decreasing its costs. By labeling it as an “entitlement,” the likes of Mitch McConnell have argued that it drives up federal deficits along the lines of Medicare. It just so happens that that’s actually impossible, since by law, social security can’t contribute to the federal deficit! It’s self-funded. 

There’s always a bit going on behind the scenes politically with social security, though it’s not always in the news, Shedden says. She encourages everyone — young and old — to pay attention to it when it makes the news, figure out where their political representatives stand on the issue, and vote accordingly. Young people, she says, need to understand how much is at stake and how much they’ve contributed to their future already. 

How can I check?

Go to ssa.gov, then to My Social Security, then to Create an Account, and you can check it whenever you want to make sure your earnings are posted accordingly. And talk to a licensed professional when you approach retirement age to figure out when you should begin collecting, based on your personal situation. They’ll be able to crunch all the numbers.

So is it ever going to go away?

Nah — the world may be going to hell in a hurry, but Shedden, who’s an optimist, says they’ll find a solution. It’s also worth noting that it’s an important issue to the constituency that tends to vote in large numbers — i.e., older folks — and because of that, it has, in some ways, reached third-rail status in American politics. 

Social security is a crucial part of being American, and an act of tremendous foresight by the Roosevelt administration when they created it in 1935. To this day, many people don’t have a retirement plan (pension, 401(k), IRA). They just tend not to take care of their own retirement finances. And that’s the amazing thing about social security: It’s there even if you haven’t done the planning you were supposed to. It won’t allow you to retire rich, but it’s an example of the government taking care of people — even if it means, in a way, saving them from themselves.