Social Security and retirement are often mentioned in the same sentence when speakers or writers address the subjects of old age, the elderly U.S. population, retirement from business and pension plans. Financial planning for a working person's retirement years usually focuses on the amount of Social Security benefits and monthly payments along with retirement savings accounts and various means of supplementing retirement income. And now that members of the baby boomers' generation are either approaching or experiencing retirement age, the number of retirees entitled to Social Security retirement benefits is constantly growing.
In the U.S., the Social Security Program was initially created in 1935, during President Franklin D. Roosevelt's administration, to secure basic retirement benefits for workers and their families. Social Security benefits are allotted to each individual, relative, in some degree, to his or her employment record and total contributions to the system. All Social Security benefits are issued and overseen by the Social Security Administration (SSA), and since 1965, health insurance benefits have been available under the Medicare program.
The Federal Old Age, Survivors, and Disability Insurance (OASDI) pays monthly benefits to retirees, to families in which the wage earner is deceased, and to former workers now unemployed as a result of sickness or accident. Working time requirements for eligibility are minimal for all those who have contributed to the program, and financial need is not a listed requirement. Social Security and retirement benefits are now growing in effectiveness and sophistication.
A number of important dates, amendments and events mark the evolution of the Social Security Administration and its programs in the U.S., starting in 1935, when President Roosevelt first signed Social Security into law. Then, in 1954, under President Dwight Eisenhower, Social Security amendments initiated a program for disability insurance. Later, in 1956, amendments to the Social Security Act provided benefits for disabled workers of ages 50 to 64; and in 1960, President Eisenhower signed a law allowing benefit payments to disabled workers, regardless of their ages, as well as to their dependents. Then, in 1965, the Medicare bill was signed by President Lyndon Johnson. This extended health coverage to nearly all Americans aged 65 and older. During the program's initial three years, close to 20 million beneficiaries enrolled in Medicare. In 1972, an amendment created SSI (Supplemental Security Income) and increased Social Security benefits for elderly widows and widowers.
Progress was made for U.S. citizens when the Social Security Independence and Program Improvements Act of 1994 was passed by a unanimous vote in Congress and signed into law by President Bill Clinton. This made the Social Security Administration a completely independent entity and agency. When President Clinton signed the Senior Citizens Freedom to Work Act of 2000, full Social Security retirement benefits for all citizens of normal retirement age and over were provided for, without the requirement of being "substantially" retired. With this historic event, Social Security retirement benefits had truly come of age. Since year 2000, full retirement age has been increasing gradually from age 65. By 2022, it will be 67. Minimum retirement age is currently 62 for workers and 60 for widows and widowers.
So what should we do to adequately prepare for retirement? What steps should we take to ensure financial security for our senior years? Well, consulting a financial advisor can be of great help in planning ahead for your retirement. And, it's a good idea to read related literature. Some generally accepted practical advice when deciding how to best invest your assets, is to subtract your current age from 100. Then, if your age is the larger of the two numbers -- (of the number subtracted, and the resulting number), invest the percentage of your assets equal to your age number in liquid or easily accessible assets (e.g., CDs, money market and savings accounts), and the smaller percentage amount in stocks, bonds, property and less liquid assets. Your IRA, 401k or retirement fund should remain untouched -- except for any additions, until you retire. (As an example, if you are now 60 years of age, 60% of your assets should go into liquid or easily accessible investments, and 40% into less liquid ones.)
So when considering Social Security retirement funds, plan carefully for your future financial freedom. Then you can be prepared to enjoy every moment of your "Senior Sabbatical." Be a Savvy Senior and gain the know-how to celebrate life's true riches in your secure and serene retirement years.