26 ID Trends NAILBA
Social Security Trends
Social Security ’ s 2021 Snapshot
There are almost 70 million American ’ s drawing Social Security benefits . So why are advisors content to be ignorant of basic knowledge about this program ? The short answer is : we are busy trying to stay on top of our own areas of expertise . Our brains are full . Hang with me , in just a few minutes you can master more knowledge of Social Security than your peers . I can ’ t make this fun , but I can break it down into some easily digestible information that will propel you to the top 1 % of our industry .
Social Security keeps about 15 million Americans out of poverty . Social Security recipients got a 1.3 % raise for 2021 , compared with the 1.6 % hike beneficiaries received in 2020 . Forecasters are expecting a 3 % increase for 2022 — but this doesn ’ t mean anyone actually gets more money in their pockets as the Cost of Living Increase ( COLA ) is tied to inflation . Increases in Medicare costs quickly absorb any increase in Social Security , which puts Seniors back instead of forward after each COLA “ increase .” Still , knowing how much COLA will be next year is information that your clients want .
How much do you know about Social Security ? Most advisors are blissfully ignorant . I feel your pain . We have so much we must stay up on , it ’ s hard to branch out to other bodies of knowledge if they are not absolutely necessary . Well basic knowledge of Social Security is absolutely necessary . Here are some basics .
Sylvia Gordon , JD is president of Gordon Marketing , a national Medicare FMO . Together with her sister , Rebecca Gordon , they host a weekly Youtube show , The Wednesday Wrap Up . She is a frequent national speaker on digital marketing for insurance agents . Sgordon @ gordonmarketing . com
The Basics Did you know that all your pay is not subject to Social Security taxes ? FICA tax rates haven ’ t changed since the 1990s — so this is ripe for change . Sure , FICA feels like a huge bite out of your pay each month , but there is a maximum earnings cap subject to the Social Security tax . If you earn over $ 142,800 , none of that income is taxed for SS . ( There is no earnings cap for Medicare ). One of the easiest ways to shore up Social Security is to increase or eliminate this cap on earnings . I fully expect this to happen , and it ’ s more likely in the current administration that it would be in a Republican administration .
High earners have unrealistic expectations for how much they will be able to draw at retirement . To get the highest amount , you must wait to draw till age 70 .
The highest amount anyone is eligible for in 2021 is slightly under $ 4k per month .
As recently as 2017 , most people got more out of Social Security than they paid into the system . That is not the case anymore . The only people who will get more out , are those with lower incomes . ( Again , Medicare is different . Most people get more back from the Medicare system , than they paid in ).