North Oaks Senior Living Community kicked off its new speaker series, the North Oaks Institute, on June 30 with an appearance by Social Security Administration acting commissioner Carolyn Colvin.
The series is “aimed to educate the community about issues facing the older population. … The North Oaks Institute will periodically feature industry experts who can provide clarity and information on pressing issues,” according to a news release.
Colvin, already once retired herself, returned to public service in 2011, being nominated by the President Barack Obama in 2014 for her current role. Colvin is responsible for one of the largest federal agencies, with SSA comprised of nearly 80,000 employees.
The agency is responsible for paying monthly benefits to more than 60 million recipients and maintains lifetime earnings records of more than 165 million employees. Additionally, Colvin speaks at events such as the North Oaks Institute about financial literacy and misconceptions regarding Social Security.
“Social Security is important to all of us, old and young, workers and business,” she told the audience.
Signed off on by Franklin D. Roosevelt in 1935, the initial Social Security Act covered more topics than what most think of as “Social Security” today. According to SSA’s website, “The original 1935 law contained the first national unemployment compensation program, aid to the states for various health and welfare programs and the Aid to Dependent Children program.”
Today, people are worried and uninformed about Social Security — they do not know what they are entitled to or when they are entitled to it, and people are worrying that Social Security will run out for future generations, Colvin said.
According to Carolyn Colvin, the most important step that an individual can take to secure his or her future is saving.
Colvin explained to the audience that Social Security stays with you “from the day you are born when we give you your Social Security number until your death, and then beyond because we serve your survivors when you die. Few government agencies touch as many lives as we do at the Social Security Administration.”
However, many people rely too heavily on these benefits, she said. Colvin was sure to point out that Social Security is not meant to provide for anywhere close to the entirety of retirement.
“I want to emphasize that Social Security’s insurance protection provides a foundation of retirement security for almost all workers and families in the country, but it was never intended to be the sole source of your retirement,” she said. “The average Social Security benefit is very modest, it’s about $1,350 per month for retirement workers and $1,290 a month for aging widows and widowers. So you can see that that’s not efficient for your retirement needs.”
According to Colvin, the most important step that an individual can take to secure his or her future is saving. “People should certainly try to save as much as they can … you really cannot afford not to save.”
In discussing increasing retirement ages, Colvin said that “for people who are able to, they should work as long as they can before retirement.” Another factor to consider, she said, is that for each year that an individual postpones accepting their Social Security checks, they receive an 8 percent increase in benefits for each year after they retire. This means that for someone whose full retirement age is 67, by waiting three years and retiring at 70 instead, the individual will receive 24 percent more benefits each month.
In order to be completely prepared for retirement, Colvin says that the best idea is to save as much as possible, for as long as possible. “You know the value of compound interest … Even if you start off small, you need to establish putting aside a certain amount for yourself. Just like you pay your bills, every month I pay my bill; my first bill is me.”