29 July 2010

The "Greedy Geezers" Lie Rebuted: Social Security Protects The Disabled!

Back in the forties and fifties, my grandfather called Social security an "Old Age Pension" and sadly today all too many, who should really know better, have the misconception that it's only protection for older workers entering retirement.

The facts belie that pervasive misunderstanding.  According to the Social Security Administration, nearly a third of men (3 in 10) and twenty-five percent (1 in 4) women will become seriously disabled before retirement age.  Disability brings with it severe and unexpected financial burdens and hardship.  Studies show that if a 50-year old , without expensive private disability insurance, suffers a two year period of disability, that person can lose over $1-million in retirement assets.  Social Security provides protection against poverty in retirement years and benefits to the disabled individual's family members, especially their children--children account for 20% of the 1.8-million recipients of SSDI (Social Security Disability Insurance).

What is Social Security Disability Insurance?

SSDI provides cash benefits to eligible, disabled Americans. The program provides monthly benefits to people who have worked in the past and paid their Social Security taxes. Compared to SSDI, private disability insurance generally is not adjusted for inflation, is not designed to cover children of disabled workers and is not available to workers with disabilities and other health problems.

Who pays for SSDI?

When you work, 85 cents of every Social Security tax dollar you pay goes to the Old-Age and Survivor’s Insurance (OASI) trust fund which pays monthly benefits to current retirees and their families and to surviving spouses and children of workers who have died. The other 15 cents goes to the SSDI trust fund to pay benefits to people with disabilities and their families.

Who is eligible for SSDI?

In order to qualify for SSDI, an individual must (1) Have an eligible disability; (2) be the primary wage earner of their family; (3) have paid their FICA taxes; (4) be younger than the Social Security retirement age; (5) be insured for benefits; and (6) go through an application process.

Who Receives SSDI?

Nearly 8 million disabled workers, more than 1.8 million minor children of disabled workers, over 930,000 disabled adult children and almsot a quarter million disabled widow(er)s.
And, despite the lies, misunderstandings and exaggerations regarding Social Security and SSDI, no one is getting rich from receiving SSDI: There is no flat rate that beneficiaries receive. Instead, the disability benefit is linked through a formula to a worker’s earnings before he or she became disabled with annual payments up to only $25,570 for a person who had earned $90,000 while still healthy.
In 2008, disabled worker beneficiaries received an average monthly benefit of only $1,063.10. Once a person hits retirement age, they are automatically switched to regular Social Security retirement benefits.

Did you know?

For a young worker with a spouse and two children, Social Security provides benefits that are equivalent to disability insurance worth $465,000.  About 22 percent of families with disabled workers live below the poverty line. But without Social Security, their circumstances would be even worse!

To reach an SSA office near you, call 1-800-772-1213.
· Online: Visit http://www.socialsecurity.gov/disabilityonline/

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