How Many Seniors Rely Mostly On Social Security?

[OneEyedDiva]

In a way, I know what it must be like to live on Social Security only. I retired at 50 and because of that my pension was reduced by 12% and I was too young to collect SS, I never asked my husband to contribute to my personal expenses; he was having financial troubles of his own trying to keep his business afloat and literally paying out more than he was taking in at times.

When I first retired, I was getting approximately $1,200 a month. As I've mentioned on the forum a few times, what helped me is that I was debt free, live in a co-op where our housing expenses are extremely low, have great retiree health benefits (including prescription coverage) and a nice nest egg that I continued to contribute to. We were getting pension COLAs for a few years after I retired, but they were discontinued when Christie became our governor. I didn't like it, but realized it was necessary because our pension plan was short by billions.

 

[Muskrat]

When I tried to research this very thing several years ago I realized the question is wrong. We all get different amounts for our social security...therefore whether or not we can and do live on that amount is relative to our personal situation. I only receive about 1300 a month ss. I would be hard put to pay my bills with that amount over time without other forms of income. And I own my home and have zero debt. I do not exactly know the correct question...

 

[Wombat]

I'm surprised to read that your pension amount was based on how much you had in assets. I'm not familiar with your pension system...so is the pension a state pension, not connected to contributions from work? It's nice that you are living very comfortably now.

The state pension is means tested there is an assets test and an income test which ever results in the least pension is the one they apply.


I think it is fair because no one contributes toward the state pension and everyone is entitled to it.


People's dependence on it is reducing due to compulsory superannuation which has been in force since the 1980s


https://www.servicesaustralia.gov.au/how-much-age-pension-you-can-get?context=22526

 

[OneEyedDiva]

The state pension is means tested there is an assets test and an income test which ever results in the least pension is the one they apply.


I think it is fair because no one contributes toward the state pension and everyone is entitled to it.


People's dependence on it is reducing due to compulsory superannuation which has been in force since the 1980s


https://www.servicesaustralia.gov.au/how-much-age-pension-you-can-get?context=22526

Interesting. Thank you for the explanation.

 

[StarSong]

Interesting. Thank you for the explanation.

I've long wondered how superannuation works and spent some time learning about it this morning.

From what I can gather, superannuation is sort of a hybrid of SS and (portable) 401K plans.

AU employers make compulsory contributions (currently a minimum of 12% of an employee's wages), most of which is subject to lower income tax rates. Employees can also contribute to those annual savings, but anything above a combined employer/employee total of $30K AU ($21,500 US), loses tax advantages.

These funds are invested in equities (stocks), commercial & residential real estate, and fixed income assets (bonds).

According to Wikipedia:

At retirement, each member has a lump sum balance. Most superannuation funds offer an account-based (drawdown) product for drawing retirement income. Some funds provide access to lifetime annuities purchased using the member's balance.

A person can withdraw funds out of a superannuation fund when they meets one of the conditions of release, such as retirement, terminal medical condition, or permanent incapacity, as noted in Schedule 1 of the Superannuation Industry (Supervision) Regulations 1994.[32] As of 1 July 2018, members have also been able to withdraw voluntary contributions made as part of the First Home Super Saver Scheme.

Upon death, superannuation balances are paid to survivors.