Can you believe that when Social Security was created during Franklin D. Roosevelt's Administration, the average life expectancy was 59, and people couldn't draw benefits until age 65? Now average life expectancy is nearing 80, and the focus of the entitlement retains many of its original tenants, goals, and funding mechanisms.

Social Security was created in 1935 after the Great Depression and widespread bank defaults were the reality at the time. It was originally called “Federal Old-Age, Survivors, and Disability Insurance.” Talk about politically incorrect.

-Foundation for Financial Wellness

Video Transcript

Ok, how about some quick history of Social Security? Social Security was created in 1935 after the Great Depression and widespread bank defaults were the reality at the time. It was originally called “Federal Old-Age, Survivors, and Disability Insurance.” Talk about politically incorrect.

At that time poverty rates for seniors were more than 50%, and this social program was an attempt to mitigate the dangers of modern American Life (old age, poverty, unemployment, widows, and orphans).

It was designed to be more than just a check. Primarily it was meant to be a guaranteed lifetime income indexed to inflation with spousal and survivorship benefits. It was given preferential tax treatment. It was never designed to be a beneficiary's sole source of retirement income.

Most retirees were expected to have at least three primary retirement income pillars. We talked about this in other lessons – One being Social Security – Two being your employer pension plan – Three being your personal savings.

Now, present day Social Security realities – People are living much longer and claiming much sooner.

Originally Social Security was reserved for the minority – people who “beat the odds.” When the Social Security Administration was founded, life expectancy – get this – was 59. Benefits could not even start until age 65!

So today, it’s expected that retirees will draw from Social Security for a very long time! Now, life expectancy is nearing 80! Many claimants start taking benefits as early as 62. That’s almost 20 years.

So, a quick review for you to decide – any decisions to make or actions to take.

Are you maybe making some assumptions about Social Security that you shouldn’t be making? Have you requested your Social Security estimate? And, more importantly, are you confident that you know all of the considerations that you will need to make before making the decisions specifically on your Social Security benefits? It’s much more nuanced.

So, as always, don’t forget. Take advantage of your private counseling. This could be something that you bring to that session. It’s included. It’s private. It’s confidential, and it’s always with one of our Certified Financial Wellness Counselors. To schedule your counseling session, simply click on the “Request Counseling” button.