Social Security ensures important protections for all Americans, but it is of vital importance to young workers. Here is why:
- As the events of September 11 showed, anyone can be killed at any moment, and Social Security provides valuable life insurance to protect the families of workers.
- According to the Social Security Administration, two out of every ten American workers age 20 will die before reaching normal retirement age.
- A 30-year old worker earning $27,000 has Social Security life insurance protection for his wife and two young children with a present value of $380,000
- Social Security pays monthly benefits to the family members of victims of the 9/11 attack, as well as the families of soldiers killed serving our country, in addition to the familes of other American workers who die prematurely.
- In 2002, Social Security was paying the 9/11 families benefits totaling more than $2.9 million each month. (The amount is greater now, due to inflation adjustments)
- Between October, 2001, when the first benefits were paid, and August 2002, Social Security had paid the families a total of $30.8 million.
- Disability can affect anyone at any time, and Social Security provides valuable disability insurance.
- According to the Social Security Administration, three out of ten 20 year old men and one out of four 20 year old women will become disabled before reaching retirement age.
- A 30-year old worker earning $27,000 with a wife and two young children has Social Security disability insurance protection with a present value of over $365,000
- Without Social Security, 55 percent of disabled workers and their families would live in poverty.
- A young worker would never be able to accumulate the level of life insurance or disability protection through savings in a private account, and the private sector does not offer many of the most valuable features of Social Security.
- Only about 23 percent of American workers have long-term disability insurance protection other than Social Security
- Unlike Social Security, the private sector disability plans are generally less generous, not adjusted for inflation, do not cover children and dependent spouses of workers, and are not available to workers with pre-existing disabilities or other health problems. Life insurance protection, though more prevalent, also fails to offer many of these same features, such as monthly benefits with inflation protection.
- All Social Security benefits are generated from a single formula; changing the retirement piece necessarily changes this piece as well
- The Bush Administration has stated that its plan would affect the benefits of surviving spouses and children.
- Although the Bush Administration has not acknowledged that disability benefits would be reduced, it would be difficult, if not impossible, to shield these benefits from change as well. (See pages 203-4 of The Battle for Social Security, for an explanation of why.)
- Prior to the maturation of Social Security, elderly parents routinely moved in with adult children. Social Security can be viewed as a transfer mechanism, where adult children support their parents, but in a manner which permits the parents to live in dignity and independence and the children to focus their economic resources on the next generation.
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