Social Security a Lifeline for Many

Once upon a time, defined benefit plans were the retirement plan of choice for most employers. The defined contribution plan, primarily in the form of the 401(k) plan, resulted in a major shift toward participants taking more responsibility for their own retirement savings. Unfortunately, many individuals are not skilled investors, resulting in a widespread savings shortfall. Add other financial challenges to the mix and the challenge is even greater. With DB plans declining and DC plans producing inadequate savings, many have turned to Social Security as their primary, if not sole, source of income in retirement. AARP highlights some key Social Security data:

• In 2012, over 43 million Americans were over age 65; that's about one in seven out of a population of 313 million.
• 92% of those over age 65 receive Social Security benefits
• Roughly two out of every three retirees receive Social Security benefits
• $775 billion in Social Security benefits are distributed, with $1.4 trillion put back into the economy
• Without Social Security, 44% of the 65+ population would have income below the poverty line
• 32% of Americans age 65+ rely solely on Social Security

Social Security remains an important piece of the retirement puzzle. Ensuring its availability for future retirees should be top of mind for the foreseeable future.