Awareness of Social Security promoted

Agency's chief of staff visits Juneau, stresses need for readiness

Posted: Sunday, June 18, 2000

As Social Security turns 65 this year, the federal system for providing retirement and disability benefits is being reconsidered.

``There are some who say at 65 it's time to retire it,'' acknowledged Brian Coyne, chief of staff for the U.S. Social Security Administration, alluding to comments by Republican presidential candidate George W. Bush.

But Coyne, who was in Juneau on Thursday to meet with the four-person Social Security field office here, said the Clinton administration is broadening the scope of the agency's mission to include consciousness-raising about the need for personal financial planning.

In an interview, he steered clear of comment on Bush's proposal to allow Social Security recipients to invest benefits in the stock market.

But Coyne stressed that Social Security was never intended to be the sole source of retirement income, not even when President Roosevelt signed it into law in 1935, during the Great Depression.

Now, demographic trends pose a serious challenge to the system.

By 2015, projections show that more will be paid out in benefits than will be collected in payroll taxes, due to the aging of the population.

The Social Security trust funds, expected to peak at $4 trillion, will be completely exhausted by 2037, once the full impact of the baby boomers' retirement is felt. Then payroll taxes will only be sufficient to pay 72 percent of benefits owed.

Last fall, the Social Security Administration began mailing out projections of retirement benefits to every worker over 25 years old.

That was done to counter widespread ignorance of benefit levels, Coyne said. ``Half of the people are shocked at how small it is, and the other half are shocked by how big it is.''

The projections will be more accurate for older workers, who have a longer earnings history upon which to base them, Coyne said. But workers should read them carefully and notify the agency of any corrections that should be made, he said.

Meanwhile, the Social Security Administration is trying to get the word out that federal benefits aren't enough to ensure a comfortable retirement.

``It's hopefully a wake-up call,'' Coyne said.

In addition to Social Security, retirees need an average of about 70 percent of pre-retirement earnings to maintain their standard of living, according to the agency.

But Social Security is the only source of income for 18 percent of retirees, and the main source for two-thirds, Coyne said. And the savings rate among baby boomers is lower than it was for their parents, he said.

The Social Security Administration Web site,, now includes a retirement planner, with three different methods for calculating retirement income.

``With this information, workers will be better prepared to take steps two and three - seeking information about private pension plans they may be eligible to receive and making decisions about the need for savings and investments,'' Kenneth S. Apfel, commissioner of Social Security, said in a recent news release.

At the Web site, workers also can submit corrections for their retirement projections. And there is information about training programs for the disabled and tax incentives for employers who hire disabled workers.

Of 44 million beneficiaries in the Social Security system, about one-third are not retirees. There are 8 million survivors and 7 million disabled beneficiaries.

For disabled benefits, the Social Security Administration has included Alaska among 10 states in a pilot project to increase the amount of personal contact with applicants.

With the previous approach, which relied almost exclusively on paperwork, ``too many cases were being overturned on appeal,'' Coyne said.

Also, the expectations for disability have changed over the years, he noted: Heart attacks are less often a indication of imminent death and there is an increased understanding of the complexity of mentally related disabilities.

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