Paul Kusuda’s column
Paul H. Kusuda
priorities show that one fifth of Social Security beneficiaries receive disability or young survivors benefits.  Retirees are not
the only ones who are beneficiaries.  After all, the program iscalled Old-Age and Survivors, and Disability Insurance.  As
years went by, Medicare and Medicaid were added as parallel social insurance programs.  

Social Security benefits comprise one of three parts of retirement income streams, the other two being savings and
retirement programs.  Benefits are not means-tested, that is beneficiaries are not required to prove financial need or low-
income status.  Since they comprise only part of funds needed to meet expenditures after a person’s working years are
ended, foresight is needed to anticipate the other two parts.  

When retirement programs are not provided by a person’s employer, they need to be established independently.  Easy
enough to say but not as easy to perform.   Personal savings plans need to be started years before work retirement.  
Unfortunately, for too many, current income levels prevent carrying out such plans.  Instead, day-to-day expenditures and
use of credit cards interfere with long-term plans for the future.  The concept of “living wage” is all-too-painfully obvious.

Not to be forgotten is the deduction from Social Security benefits each month for Medicare Part B to cover out-patient
medical costs.  Those costs increase each year, and even when benefits are increased to reflect some relationship to
increases in inflation, monthly checks show the impact of rising medical costs.  Unfortunately, 61 percent of elderly
beneficiaries depend on Social Security to provide most of their income.  For about a third, it accounts for 90 percent of their
income. With respect to minority-race groups, that 90 percent level of income describes 41 percent for Asian Americans, 45
for African Americans, and 52 percent of Latinos as compared with 32 percent for Whites.

The population proportion of the aged and longevity were not anticipated by those who calculated costs of the program.  
Until the middle of the 1980s, Social Security collected more each year than it paid out and invested trust funds in interest-
bearing Treasury securities.  Since then, costs have increased and will continue to increase at a greater rate than before.  
Social Security trustees believe that absent any action plan, trust funds will be exhausted in 2034.  Also, if no action is taken,
Social Security could continue to pay three-fourths of scheduled benefits through taxes being collected as they are today
from employers and employees.  Needed now is a plan having a mixture of increased taxes and minor benefit
modifications.  That will not be an easy task, so politicians have pushed it aside from year to year.  As some put it:  “Push
has come to shove.  It’s time to act!”

A little-known, little-discussed element in the dilemma of funding Social Security is the Earnings Suspense File described
in Consumers Affairs, April 2006, by Martin Bosworth. His article began with the question “Have you ever wondered what
happens to all the money collected by Social Security that beneficiaries don’t get?” He said the answer is known as the
Earnings Suspense File (ESF) that “…continues to accrue money at roughly $6 billion a year…(It)…was established to
By Paul H. Kusuda

AARP posted an article by Gary Strauss in August 2017 about Social Security that was
interesting, so I decided to pass along some of the information.  He noted that about 61.5
million U.S. residents collect SS benefits from the program signed on August 14, 1935, by
President Franklin D. Roosevelt.  Of that number, the majority are 62 years of age and older;
about 4 million are children younger than 18 as beneficiaries of deceased, disabled, or retired

In 1935, annual benefits averaged about $15,881; this year, for anyone retiring at age 66, it will
be $32,244.  Benefits are designed to comprise about 38 percent of average pre-retirement
income.  The amount is based on income earned in the 35 highest-earning working years, with
the base of ten years (40 quarter-years of work credits).

Additional information from the August 2016 report from the Center on Budget and policy
collect Social Security earnings
reports from filers with mismatched
names and SSNs, while the Social
Security Administration attempts to
track down filers identities.” Lack of
identifying information about workers
means SSA cannot determine
beneficiaries when false or stolen
Social Security numbers are used.   
Consequently, theSSA trust funds
benefit from the no-payout situation.  
Undocumented workers are the big
losers since they have paid in but will
not apply for benefits.