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Tom: We have social security on tap for our listeners today, correct?

Mellody: We certainly do. As most people know, social security is the primary program that ensures that retirees, those with disabilities, and other individuals who are in need have a safety net. This month, the program marked its 80th year of operations, having been signed into law by Franklin Roosevelt in august of 1935, and i thought it would be a good time to talk about the program and provide some information to our listeners that can help them better understand – and increase – their benefits.

Tom: First, tell us what has changed over the past 80 years with regard to the program.

Mellody: Actually, the program has remained very much the same over the past 8 decades. The biggest changes have come not in the program, but in the population it serves. When Social Security was launched in 1940, a 21-year-old male had a fifty-fifty chance of living to the age of 65. Today, a male reaching retirement age is expected to live to 85, and on average women reaching 65 can expect to live until they are 87. As a result, the average retiree receives 12 more years of Social Security benefits than she did in 1940. And it is not just that people are living longer. Population growth, combined with a greater number of people retiring early, has caused the number of people who receive benefits to balloon. Social Security is expected to serve over 90 million people just 20 years from now! That has put pressure on the program, and these trends will have to be addressed at some point.

Tom: That is for sure, especially because the program is so important for retirees.

Mellody: Absolutely, Tom. As I have mentioned before, Social Security is the underpinning of many Americans’ financial well-being in retirement. Currently, more than 60 million American retirees received Social Security checks, with the average monthly check totaling $1,221. The average retiree depends on this money for 70% of her income, and of those receiving these benefits, one in three people depend on it to cover at more than 90% of their expenses. That is not a lot of money to live on, so you want your monthly check to be as big as possible.

Tom: How do we do that?

Mellody: Here’s the most important thing to remember: the longer you wait to start collecting Social Security, the bigger your benefit will be. Currently, you can take early retirement at 62, full retirement at 66 (or 67 if you are currently younger than 55), or additional benefits if you wait until 70.

For example, if you turned 62 this year, you earn $50,000 a year, and you decided to start collecting social security now, you would receive just over $1,000 a month. But, if you waited four years and collected starting at age 66, your monthly check would be over $1,400. Even better, if you wait until age 70, you get 32% more than your full benefit amount. Using our example, your monthly benefit would rise from around $1,400 to almost $2,000 a month. So if you can hold off, it’s clearly worth it.

Money Mondays: 80 Years Of Social Security And How It Can Benefit You  was originally published on

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