Baby boomers want to know:
- Will Social Security be there for me?
- How much can I expect to receive?
- When should I apply for Social Security?
- How can I maximize my benefits?
- Will Social Security be enough to live on in retirement?
Baby Boomer Social Security Question #1
Will Social Security be there for me?
Answer: Yes
OASDI Trust Fund still growing
- Trust fund balance on 12/31/11: $2.677 trillion
- Total income: $840 billion
- Total expenditures: $786 billion
- Net increase in assets: $ 54 billion
- Trust fund balance on 12/31/12: $2.732 trillion
What would it take to restore solvency to the system?
• What would it take to restore solvency to the system?
• Increase maximum earnings subject to Social Security tax
(currently $113,700 in 2013)
• Raise the normal retirement age
(currently 66 for individuals born between 1943 and 1954; 67 for those born in 1960 or later)
• Lower benefits for future retirees
(escalate benefits based on increases in consumer prices rather than wages)
• Reduce cost-of-living adjustments (COLAs) for all retirees
Baby Boomer Social Security Question #2
How much can I expect to receive?
Answer depends on:
1) How much you earned over your working career
2) When you apply for benefits
How Social Security benefits are calculated
• At age 62, each year’s earnings are tallied up and indexed for inflation
• Highest 35 years of earnings are averaged (AIME)
• AIME is divided by three “bend points” to determine your primary insurance amount (PIA). This is the amount you'll receive at full retirement age.
• Benefit is increased each year by cost-of-living adjustments (COLAs)
Full Retirement Age (FRA)
Year of Birth Full Retirement Age
1943-54 66
1955 66 and 2 months
1956 66 and 4 months
1957 66 and 6 months
1958 66 and 8 months
1959 66 and 10 months
1960 and later 67
Baby Boomer Social Security Question #3
When should l apply for Social Security?
Answer depends on:
• Health status
• Life expectancy
• Need for income
• Whether or not you plan to work
• Survivor needs