A high percentage of people who reach the typical retirement age rely heavily on Social Security. According to the Social Security Administration, one-third of recipients say that Social Security comprises at least 90% of their income, and over 60% state that Social Security is their primary source of income. This is not especially good news when you consider the fact that the average Social Security payout is around $1175 a month at the present time, and there have been no increases in the last two years and counting.
To make matters a bit more challenging, if you have been paying attention you’re well aware that the federal deficit has dominated the political discourse lately. The fact is each year we spend 40% of our annual federal budget expenses – 54% if you add other “safety net” spending – on Social Security, Medicare, and Medicaid, and that percentage is rising every year. So, of course, many lawmakers are exploring ideas to reform these programs and make them more solvent. A very straightforward and direct way to reduce spending on these programs would be to raise the full Social Security retirement age.
At the present time full retirement age in the eyes of the Social Security Administration is 66 for people who were born between 1943 and 1954. Full retirement age then rises by two months per year, so if you were born in 1955 your full retirement age is 66 years and two months; if you were born in 1956, your full retirement age is 66 years and four months. It goes up by these two-month increments each year until 1960. Americans who were born in 1960 and after become eligible to receive their full Social Security benefit at the age of 67.
If you are currently planning for your retirement this is something to pay close attention to as the situation unfolds. And if you want to be truly prepared for retirement and not totally dependent upon Social Security, you may want to arrange for a consultation with an experienced retirement planning attorney who will set you on course toward financial freedom during your golden years.
Larry Parman
President and Founding Attorney
Parman & Easterday
Since founding Parman & Easterday in 1985, Larry has led over 1,000 free, community-service education programs and helped more than 10,000 Oklahoma families go from putting off their estate plan to getting it done. His goal for every client is the same: to become the person their family calls "the one who took care of everything."
Larry is the author of three books: The Straight Shooter's Guide to Estate Planning; Estate Planning Basics; and Guiding Those Left Behind in Oklahoma. He served as Oklahoma's Secretary of State and Secretary of Commerce, and his firm is the only member of the American Academy of Estate Planning Attorneys in the state.
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