On this day, August 14, 1935, President Franklin D. Roosevelt signed the Social Security Act of 1935 into law. It was a historic day for senior citizens and socialists throughout America. Making the people of any age or other group dependent upon the government is a socialist construct.
I’m sure you’ve all heard of Social Security and many of you younger folks have heard that Social Security will be broke before you reach retirement age. Allow me to explain one of the main reasons why that may be so.
In the 1930’s and for several decades after, most companies provided a retirement pension plan for their employees. When someone retired from a company, they relied on that pension plan to provide their needs for the rest of their lives.
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However, after the Great Depression, many pension plans failed to provide enough of an income for retirees to live comfortably on. To help compensate for that, the socialist Democrats, led by Franklin D. Roosevelt, pushed a program labeled Social Security to help provide extra funds for people who were retiring. It has been revised several times by Congress.
Social Security was never designed to be the sole retirement income for anyone!!! It was designed to be a supplement to someone’s pension plan.
Consider the fact that the average lifespan for a man in the US in 1935 was only 63.9 years of age and only 59.9 years of age for women. In 1935, at the time the Social Security Act was passed, there was less than 8 million Americans 65 years of age or older in the entire United States. Today, states like Arizona, Texas and Florida get that many people aged 65 and older every winter.
Since Social Security was supposed to start at age 65, the payout of the government was going to be minimal at best.
Today, very few companies offer pension plans. If they do offer any type of retirement plan, it’s usually in the form of a 401K or something similar. However, 401K plans limit how much can be contributed every year and in most cases, they are based on the performance of the Stock Market, which is highly volatile and not something I would want to stake my retirement on.
Without pension plans, and insufficient limiting 401K type plans, many American seniors are today relying on Social Security for their sole retirement income. Now consider that the average lifespans for men and women in America, as of 2012, 76.4 years for men, 81.2 years for women. As of the 2012 US Census, there were 41,507 Americans 65 and older, with another 81,926 at the ages of 45-64.
Social Security was intended to be a short-term supplement, not a long term primary source of income at retirement. I will turn 65 this December. I’ve worked and paid into Social Security most of my life. If I was to retire this December and draw my Social Security, I would get a little over $1,700 a month before taxes, and yes, you do pay income tax, state and federal, on Social Security income. Due to the market crash a few years back and being unemployed for two years, I have no retirement or savings left. There is no way I can survive on a gross income of $1,700 a month and therefore, I will need to continue to work for many more years, probably up to the day I die.
The best advice I can give you is to create your own retirement savings program starting as young as possible. A standard 401K will generally not allow you to save enough for retirement. Even if you only start with a small amount every paycheck, your retirement will greatly depend on that account and not on Social Security. Don’t put all of your retirement in one place. It’s best to diversify in case one source crashes you don’t lose everything and end up as a Walmart greeter.
Sources for the above includes: The Social Security Act of 1935; Social Security Act (1935); FDR Signs Social Security Act; Social Security Act; The Social Security Act; Life Expectancy for Social Security; Life Expectancy in the USA; Life Expectancy at Birth by Race and Sex, 1930–2010; Life Expectancy in the USA Hits a Record High