First, as of January 2010, Social Security covers 51 million Americans. One third of them are not retired - they collect benefits for a disability or from a deceased spouses benefit. That's a lot of folks who rely on Social Security payments!
Now, one of eight people die before retirement... nobody is ever guaranteed a tomorrow... right? One of four people become disabled.
Scary stats, aren't they?
Did you know Social Security is based on the highest 35 years of
Retire with 32 years of employment, and you have 3 years of ZERO earnings. This is pretty significant - the calculation below shows the differences in the average assuming you made $40,000 a year (you can easily recalculate using my formula below).... this isn't your social security payment but the 35 year average plays a major role in the SS calculation.. so beware!
Retire with 35 years:
$40,000 earnings/year X 35 years = $1,400,000 divided by 35 years = $40,000 average
However, if you retire with 32 years:
$40,000 earnings/year X 32 years = $1,280,000 divided by 35 years = $36,570 average
Social Security calculations aren't that simple, of course, but they do look at a 35 year average. Many of us easily work 35 years (if I retire at 53, I've worked from 1973 - 2008.. 35 years!) as we work part time during our high school/college years, or while we haved children, and work through retirement.
However, if you choose an early retirement (or are forced into an early or disability retirement), your Social Security payments are reduced accordingly.
Can I count on Social Security?
Do ANY of us REALLY know if we can count on Social Security? Not really... Social Security isn't long gone, it simply can't be as millions of seniors would be living on the streets without any income at all. That can't happen in the U.S.A.
The real question is "How much will I get?"
The system is fully funded through 2040 (that takes me to age 85).. how about you? Do the math quickly (2040 minus your birth year) so you know how long, maybe, you can depend on Social Security.
After 2040, benefits would have to be reduced, but wouldn't totally disappear. Politicians will decide the rest.. no use squabbling over it here. There are no simple easy answers...
Can you collect workman's compensation and Social Security at the same
This is a question I answered on YAHOO ANSWERS and thought I'd share it here:
I believe you can collect both, only workers comp most likely is offset by the Social Security payments so that you get less.... same as with pension payments, long term disability payments, most or all employer related payments. They don't let you "double dip" and collect more than you would have normally... and that makes perfect sense.
Bottom line -- Social Security is a benefit you earned while you worked and paid into the system. If you qualify for a disability benefit (and it's not easy), you get Social Security Disability and an offset workers compensation payment also.
Workers compensation is an employer insurance for when you are injured at work. Some people have lifetime injuries - for example, a bad back, and will never work again. They might collect Social Security and workers comp until the attorneys work out a settlement for future income/medical expenses.