“It isn’t welfare.”

1. Social Security 1935-2006 Know these items for the SS quiz. “It isn’t welfare.”

2. There are 300 million in the U.S. About how many people • receive Social Security benefits? • a. 2 million b. 8 million c. 53 million d. 75 million • 2. About how many years (while paying in to Social Security) • do you have to work to receive a minimum Social Security • check when you retire? • a. 2 years b. 10 years c. 20 years d. 30 years • 3. The largest amount of Social Security benefits goes to: • a. children b. widows c. retired workers d. disabled • 4. If a college graduatehas worked from age 22 through 66 • (44 years), about how much can he expect on his monthly • Social Security check? • a. $255 month b. $553 month c. 2,116 month d. $2,720 month • 5. If that same college graduate dies at age 68, about how • much can his widow expect monthly if she has never worked? • a. 0% of his benefit b. 25% of his benefit • c. 50% of his benefit d. 100% of his benefit Social Security Pre-Test

3. Social Insecurity? 70% of retirees get at least half of their cash income from Social Security. 40% get 90% from Social Security. This makes Social Security the differencebetweendignityand poverty for most retirees – while literally saving some from starvation. There is no reason to believe this dependence will be less in the future.

4. Social Security COLAS 14.3% 14% 12% 10% 8% 6% 4% 2% 0 60% 3.3% for 2007 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 94 95 96 97 98 99 00 01 02 03 04 05 06 07 2001–3.5% 2002–2.6% 2003–1.4% 2004–2.1% 2005–2.7% 2006-4.1% 2007-3.3% 199.1[2006] - 192.7[2005] = 6.4 192.7 x 100 = 3.3%

5. Fact Sheet – Social Security 2006 Tax Rate Employee: 7.65% [6.2% for SS & 1.45% for Medicare] Self-employed: 15.30% 1 credit =$1,000 Only4 creditsallowed per year Creditsrequired to get minimum Social Security: 40 Maximum Social Security Benefit -$2,166 Maximum Earnings Taxable - $97,500 [Of 159 millionwho pay taxes, only 10 million make over $97,500] Average Monthly Social Security Benefits All retired workers $1,044 Average couple $1,713 Widowed mother w. 2 children $2,167 Average widow[er] living along $1,008 Disabled worker, spouse & 1 child $1,646 All disabled workers $979

6. Wage • YearBase%Max. • 1937 $3,000 1.0 $30 • 1950 3,000 1.5 $45 • 4,800 3.0 144 • 6,600 4.2 277 • 7,800 3.325 343 • 9,000 4.05 468 • 1976 15,300 5.85 895 • 25,900 6.13 1,588 • 51,300 7.65 3,924 • 60,600 7.65 (1.45 Medicare portionon alldollars) (SS=6.2%) • 2000 76,200 7.65 • 90,000 7.65 • 94,200 7.65 • 97,500 7.65 $7,458 Social Security Annual Earnings Base (and % Taken From Paychecks) Prior to 1976, quarterswere used. $50 = 1 quarter and only 4 could be obtained in one year. Starting in 1976 credits replaced quarters. $250 = 1 credit and only 4 could be obtained in one year. The $250 has gradually moved up to $1,000 = 1 credit in 2007.

7. Retirement Stool Pension And if the pension is small, savings should be much more.

8. 22% of retirees [6.6 million] get 100% of their income from Social Security. 3 retirees in 10 get 90% of their income from Social Secur. 2 our of 3 retirees get at least half their income from SS. 55% of all retirees would fall into poverty without their SS. Companies offering monthly pensions to its retirees has declined from 112,200 in 1985 to only29,700 today. Only 37 of the Fortune 100 co’s now have a pension, down from90 in 1985. 401(k) savings plans have tripled.

9. U.S. Life Expectancy Hits 78 Years in 2006 Life expectancyhas been rising since 1900 [47 to 78 years], thanks to advances in medicine and sanitation, & declines in certain types of unhealthy behavior, such as smoking. 78 in 2006 U.S. Life Expectancy at Birth 1900-2006 80years old 75 68.2 70 65 Age47 60 55 50 45 1900 50 60 70 80 90 2006 Life Expectancy in Selected Countries 73.0 China India Djibouti Angola Lesotho Swaziland Japan Canada Australia U.S. Mexico 81.0 64.1 80.0 43.3 80.0 38.0 78.0 34.0 75.0 32.6

10. Senior Income Percentage breakdown for population 65 & older: 50% of seniors would fall into poverty without SS. More than $25,000 The Coming Crises Workers 163 M 23% Workers 159 M Beneficiaries 86 M 55% Beneficiaries 53 M 22% 2006 Worker/Beneficiary Ratio 3-1 2030 Worker/Beneficiary Ratio 1.9-1 Under $15,000 $15,000 to $25,000 Social Security is the main source of income for 8 out of 10 retirees.

11. Number of WorkersSupporting Each Retiree

12. Where The Money Goes Survivors of deceased workers [6.6 M] Disabled workers [6.6 million] 14% Spouses and children of retires & disabled workers [4.8 million] 13% 63% 10% Retirees [34 million]

13. Social Security53 million people receive over $625 billion dollars.7.65 up to $97,500 [$7,458 max. for a single person]Self employed pay 15.3% up to $97,500 or $14,917.Only about 10 million exceed $97,000 in yearly income.This act was passed in 1935to go into effect in 1940.In 1940s, you paid 1% on up to $3,000 [max. of $30]. Ida Fuller [First Lady of social Security] Of Vermont after contributing $24.75 from 1937-1939 receivedthe 1st check for $22.54. She died at age 100 and collected $22,888.92 for her $24.75 contribution. Check #: 00-000-001

14. FICA gives 4-way protection Retirement 34 million retirees Survivors 6.6 mil. [spouse and children] Unmarried child under 18 or19 if still in high school. A widow who has never worked would receive 100% of his benefit. 1 out of every 8 females and 1 of every 5 males will die before age 65. 34 mil. Retirees 3.0 mil. Dependents 6.6 mil. Disabled 1.8 mil. Dependents of disabled 6.6 mil. survivors Medicare 1.45% For people over 65 For people receiving disability benefits for at least 24 months For people with perman- nent kidney failure Disability 6.6 mil. Disabled 1.8 depen. of disabled 1 out of 4 females will become severely disabled before 65.

15. Where Tax Revenue Comes From Payroll taxes 7.65% paid by workers 7.65% paid by employers Where Transfer Payments Go Retirement benefits $330 billion Survivor benefits $87 billion Disability benefits $64 billion Annual Retirement Benefit $80 Minimum $12,528 Median $25,992 Maximum Social Security Finances

16. Retirement Age 65 for full retirement but can get 80% at 62. 66 for those born from 1943-1954 but can get 76% at 62. The age threshold for “normal” retirement is increasing each year. By the year 2022, the age threshold for normal retirement will be age67. Those born after1960 can retire early at 62 with 72% of their full-retirement benefit. Corporate America had more than 112,000 pensions in 1985. 80,000have been terminated. Pensions have dropped from 35% of the work force to under 20%.

17. Progressive Benefits • Retirement benefits are based on an individual’s wages. • High-wage workers receive larger benefit checks than low-wage workers.

18. The Work Disincentive • In 2006, the wage “ceiling” for workers 62 to 64 was $12,960 [$1,080 per month]. • A person could earn as much as $12,960 and still get maximum retirement benefits.

19. The Work Disincentive • Earning over $12,960 results in a 50%reductionin Social Security benefits for each dollar earned. • This fifty percent marginal tax rate creates a large disincentive for Social Security recipients to work. Once you reach full retirement, your social securitybenefits are reduced by $1 for every $3 you earn over $34,440.

20. Declining Labor Supply Among Those Over 65 • The labor force participation rate for the over-65 has declined dramatically in the U.S. since the 1950s. • Labor-force participation rate - A measure of the percentage of the population that is either employed or actively seeking a job.

21. 46 50 40 33 27 30 Labor-force Participation (percent of men over age 65) 19 16.7 16.4 20 10 0 1950 1960 1970 1980 1990 2006 Declining Labor-Force Participation Rate For Those Over 65

22. Ida May Fuller – First Lady of Social Security Received the first check for $22.54

23. First Check Issued on Jan. 31, 1940

24. Last of the 1st 31,557 to Get SS Benefits 106 year old William Weamer was the last of the first to get benefits. 31,557 received benefits on January 31, 1940. Mr. Weamer died in July of 1981.

25. World’s Oldest Twins

26. Oldest Human Ever

27. What does it Take to Live A Long Time? Jeanne was still riding her bicycle at age 100. On her 120 birthday, she was asked, “What kind of future do you expect?” She replied, “A very short one.” Only one other person (Japanese woman) lived to be 120. There are 40 over 110. As can be seen on the graph, the “85 and over” make up the fastest growing segment of the population. There were 67,473 over 100 last year. By 2040, there will be over 580,000. When asked how she felt, Jeanne replied, “I’m feeling pretty good, but I have quit buying green bananas.”

28. Secrets to Living to 100 [67,000] Men make up only 20% of the 100 year olds but 40% of the 105 year olds. 1. Temperament plays a role. They handle stress incredible well. [So good psychologicalhealth is a key to reaching 100] 2. A life-style of moderation and exercise also helps. 3. Better educated people suffer less mental deterioration in old age. 4. Ability to roll with the punches and dwell on problems. 5. They have a low level of neuroticism, which includes symptoms of anxiety, obsessions, and phobias. [avoid confrontation & tension] 6. Two key points: Exercise your brain and manage your stress. 7. Most were funny and gregarious. • 2 things a man can do to enhance longevity: • Lose weight, or • Change genders • [It is much easier to lose weight, oh!] 8.Those who reach 100 usually have had no dementia or serious cognitive problems up through their mid-90s. 9. 90% are women but 80% of them have some dementia, 80% of the men are relatively healthy & mentally alert. 10. The reason a positive outlook contributes to a long life is that “happiness & optimism increase the number & strength of immune cells in the body. This leads to an improved ability to prevent and fight disease.” 11. And last but not least – men who had sex less than once a month had double the death rate of those who had sex at least 2 times a week.

29. Oldest Man in the World – 115Emiliano Mercado Del Toro – Aug. 21, 1891 Emiliano is from Puerto Rico. He served in the U.S. Army during WWI, therefore is the oldest living veteran.

30. World’s Oldest Woman - 115 Elizabeth Bolden Aug. 15, 1890 From Memphis, she is the 8th oldest person ever. She has 124 great grand children, 100 great-great grandchildren, and 10 great-great-great grand- children.

31. OK, this woman from Brazil, Maria da Silva, has surfacedand at 125 years old, she would be the oldest ever. Maria Olivia da Silva She was born Feb. 28,1880. She has been described as “mentally sound & rational.” She was married twice and outlived all but 3 of her 14 children. She loves to talk and lives in a small wooden shack in southern Brazil.

32. Oldest in Dallas at 108 • Her secrets for living a long life are, “Never stop flirting.” • Riding in a firetruck for her 108th birthday(although she really • wanted to go to a male strip joint), she wore a pink sweatshirt • that said, “I’m too sexy for my body.” • 2. She says, “There aren’t too many men I don’t like.” For her 104th • birthday she went for a motorcycle ride. They offered her a side • cart but she said she wanted a young, good-looking man she could • hold on to. • 3. As long as it has to do withmen, she is on cloud 9. • 4. She says two other things that contribute to her longevity are: • a good diet and a nightly shot of Jack Daniels.

33. How Long Will You Live?[The average person has the genetic makeup to live to be 87.] Start with 87 years& add or subtract the appropriate number of years 1.Attitude:Are you optimistic? Do you approach life with good humor? Are you able to let go of things that are stressful? If no, subtract 5 years. 2.Genes:Do you have some family members who have livedinto their 90s or later? Exceptional longevity runs strongly in families. If yes, add 10 years. 3. Exercise:Do you set aside at least 30 minutes a day, three days a week to exercise? Muscle-building exercises are very important. If no, subtract 5 years. 4. Interests:Do you do things that are challenging to your brain regularly? It is important to take on activities that are novel and complex. If yes, add 5 years. 5. Nutrition:Do you have a diet that keeps you lean? Carrying extra weight is not conducive to longevity. If no, subtract 7 years. 6. Get rid of smoking:Do you smoke? If yes, subtract 20 years.

34. How Long Will You Live?[The average person has the genetic makeup to live to be 87.] Start with87 years& add or subtract the appropriate number of years 1.Attitude:Are you optimistic? Do you approach life with good humor? Are you able to let go of things that are stressful? If no, subtract 5 years. 2.Genes:Do you have at least some family members who have lived into their 90s or later? Exceptional longevity runs strongly in families. If yes, add 10 years. 3. Exercise:Do you set aside at least 30 minutes a day, three days a week to exercise? Muscle-building exercises are particularly important. If no, subtract 5 years. 4. Interests:Do you do things that are challenging to your brain regularly? It is important to take on activities that are novel and complex. If yes, add 5 years. 5. Nutrition:Do you have a diet that keeps you lean? Carrying extra weight is not conducive to longevity. If no, subtract 7 years. 6. Get rid of smoking:Do you smoke? If yes, subtract 20 years. 7. Toilet: For males, do you leave the lid up on the toilet? If yes, subtract 20 years, oh!

35. Typical Benefits $1,044 for a single worker [Men average about $150 more] $1,713 for a couple You can expect SS to replace 40% of your final pay[25% for high earners & 60% for low earners] Disabled Worker $979.00 Typical Widowed Mother with 2 children $2,167 Typical Disabled Worker with Wife & Child $1,646 Maximum $2,116.00

37. Which Are You? [defining moments] 1933-1945 Silent Generation Ages 61-78 49 mil. [Great Depression & WWII] 1946-1964 Baby Boomers Ages 42-60 77 mil. [Vietnam War & Stay-at-home moms] 1965-1980 Baby Busters Ages 26-41 59 mil. [Watergate & latch-key kids] [“Generation X”] 1980-2000 Millennials Ages 6-26 72 mil. “Generation Y” [“Bull Market Babies”] [End of cold war & rise of internet] 2001-2006 Baby Oughts Ages 1-5 24 mil. “Generation Z” “Bear Market Babies” [9-11]

38. Babies Crawling Toward Boom Level “I’m an Echo Boomer” “I’m a Baby Ought” We now have over 4 million births per year and a little over 2 million deaths.

39. Age to Receive • Full Benefits • BirthFull Ret Age • 1937 65 • 65, 2 mo. • 65, 4 mo. • 65, 6 mo. • 65, 8 mo. • 65, 10 mo. • -54 66 • 66, 2 mo. • 66, 4 mo. • 66, 6 mo. • 66, 8 mo. • 66, 10 mo. • 67

40. Reliability [Will It Be There] Social Security Baby Boomers 1946-1964 [78 million] 3.3 workers per retiree to 1.9 $12 Trillion surplus by 2030 There wassupposedto be a $2 trillion surplus in 2005. The $2 trillion that was put in the SS Trust Fund has been borrowed by the government for current operations.

41. How To Fix Social Security Members of congress do not pay into SS nor do they collect from it. SS benefits were not good enough for them. Here is their plan. When they retire, they continue to draw the same pay until they die, and they get COLAs on top of that. Senator Byrd and Congressman White and their wives may expect to draw $7,800,000.00 ($7 million, eight-hundred thousand dollars), with their wives drawing $275,000 during the last years of their lives. Their cost for this is $0.00. We get around $1,000 a month after paying into the system all our lives. It would take 68 years and one month to equal Senator Bill Bradley’s benefits. Social Security could be fixed by jerking the Golden Fleece Retirement Plan from under the congressmen and putting them on Social Security. Then sit back and watch how fast they would fix it.

43. In conclusion, Social Security will not cover all of your retirement costs. You must save, save, save…

44. Answers:1.B 2. B 3. A 4. D 5. C 6. A 7. C 8. D 9. C 10. D 11. Bonus: 00 000 001 Social Security Quiz • The self employed have to pay • [Federal Insurance Contribution Act]? [both Social Security & Medicare] • a. 7.65% b. 15.3% c. 10% d. 15% • 2. How many “work credits” can you earn in one year? • a. 2 b. 4 c. 6 d. 8 • 3. The Social Security Act was created in: • a. 1935 b. 1965 c. 1789 d. 1861 • 4. At what age can you receive early benefits (with a penalty)? • a. 50 b. 55 c. 59 ½ d. 62 e. 66 • 5. Most of the Social Security benefits goes to: • a. widows b. disabled workers c. retired workers d. children • 6. How much money must you earn to establish one “work credit”? • a. $1,000 b. $1,741 c. $250 d. $2,000 e. 7.65% • 7. What percent of your income goes to Social Security and • Medicare if you are not self employed? • a. 78% b. 21.2% c. 7.65% d. 15.3% • 8. How many “work credits”does it take to qualify for minimum benefits? • a. 10 b. 20 c. 30 d. 40 • 9. The maximum benefitfor a single worker who has worked 35 years at a • high salary is around: a. $259 month b. $557 mo. c. $2,116 mo. • 10.About how many people receive Social Security benefits? • a. 10 million b. 31 billion c. 9 million d. 50 million • 11. Bonus: What was Ida May Fuller’s check number?