What you think you know about Social Security could be wrong
08/23/2013 1:55 PM
08/23/2013 1:55 PM
The average Social Security benefit for recipients in Missouri and Kansas is about $15,000 a year.
“That’s not enough to live on,” said AARP president Robert Romasco. “But for one in four recipients, that’s 90 to 100 percent of their incomes. For two out of three recipients, it’s half or more.”
When Romasco visits with retirees and near-retirees around the county, he gets an earful about their financial and emotional health.
“Twenty percent are doing OK. One percent are doing really OK,” he said in an interview. “But the rest are hurting. That’s what I hear.”
Romasco said he finds it necessary to repeat that Social Security “is only supposed to be part of the three-legged stool that includes pensions and personal savings.”
In Kansas City for a public meeting called “You’ve Earned a Say” — a forum on the present and future condition of Social Security — Romasco said it is important to present facts to counter widespread misinformation about the retirement benefits system.
As AARP’s chief spokesman and listening post, Romasco knows that the organization’s 37 million members don’t agree on everything politically. But he thinks they’re better positioned to hold a conversation about Social Security if they know that:
• The system is fully funded until 2033 as it is.
• If no revenue or benefit changes are made, benefits will drop by one-fourth after that.
• The largest share of retirees begin taking benefits at age 62, which reduces the size of benefits they would receive by waiting until later.
• Current payroll contributions are paying for current beneficiaries, but that could change as the big baby boom generation retires.
Romasco said it’s also important for members to know that AARP is lobbying against a proposal known as chained CPI that would have the effect of reducing cost-of-living adjustments to Social Security and veterans’ benefits.
“Chained CPI is a bad idea,” he said. “It’s a less accurate inflation measure for seniors, and it would worsen the gap between costs and benefits over time.”
He said the organization also wants to spread the savings gospel to help Americans understand their need to build personal retirement funds. It also needs to educate people about the complicated relationships between Social Security, Medicare and the Affordable Care Act, known as Obamacare.
“I find that people over 65 usually aren’t aware that the ACA has made things better for them,” Romasco said, such as removing the lifetime insurance cap and closing the doughnut hole” — the informal name for a gap in Medicare Part D prescription drug coverage.
More information is ataarp.org and earnedasay.org.