The U.S. Social Security system has been a hot topic recently and you may have seen or heard about it in the news. Many Americans worry about how they will pay their bills when they retire. Many Americans also worry that they may become disabled and unable to provide for their families. Social Security is a system that is designed to provide retired individuals with monthly income. It is also designed to provide Americans with income who have encountered difficult financial situations. This income can serve as insurance for retirement, insurance for a surviving spouse and children of someone who dies, insurance for disability, insurance for unemployment, veteran’s benefits, and some other purposes.
Social Security was started during the Great Depression to provide working Americans with income after they retired. The system has evolved over the years to also help poor, out-of-work, disabled, and elderly Americans. The system is going to have to evolve even more as the number of retirees begins to drastically exceed the number of working Americans paying into the system. Although Social Security is not just utilized by retires, retirees do make up the largest part of Social Security beneficiaries. A large part of these retirees’ income comes from Social Security benefits.
Recently, Social Security has evolved again and this time, Americans collecting benefits from Social Security will see an increase of 1.7% in their monthly benefits beginning in 2013. This increase is designed to provide a cost of living adjustment to the monthly payments received by beneficiaries.
For the Americans that are retiring and utilizing Social Security, this is a much needed adjustment. Before the increase, several different types of beneficiaries were receiving significantly less. Here is an estimated breakdown of the types of beneficiaries and the increases they could see in their monthly income from Social Security:
- All retired workers – Increase of $21 per month
- All disabled workers – Increase of $19 per month
- Disabled worker, spouse, and children – Increase of $32 per month
- Retired worker and aged spouse – Increase of $34 per month
- Surviving children only – Increase of $17 per month
- Aged widow only – Increase of $20 per month
- Widowed mother and 2 children – Increase of $43 per month