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Millions of Americans Get By on Social Security Alone
John Waggoner, USA Today
August 16, 2005
Mary Rathbun gets an $809 check every month from Social Security and an additional $100 in food stamps. The 74-year-old former nurse pays $550 in rent for her apartment in St. Helens, Ore. That leaves less than $400 for food, utilities and other expenses, including medical bills.
"It takes a lot of management," says Rathbun. "I watch for things that are on sale and don't drink soda." She's fortunate, she says, because her treatments for colon cancer -- which has spread to her lungs and liver -- don't require a lot of costly medications. "I think the good Lord looks over me," Rathbun says.
When Social Security was launched 70 years ago Sunday, it was meant to be a supplement for retirees, not a full pension. But today, 10.6 million people, or 22% of the 48 million who will receive Social Security benefits this year, live on that check alone, the Social Security Administration says.
Living on only Social Security isn't a happy prospect. It means stretching every dollar, depending on a patchwork of family, charity and state programs to pay for what Social Security doesn't cover -- and sometimes doing without. Those living on nothing but Social Security are often single women and minorities.
AARP, the senior advocacy group, says 25% of retired women, including 46% of unmarried Hispanic women, have no income beyond Social Security. AARP also says 33% of retired African-Americans live on Social Security alone.
Those numbers could grow as the baby boom generation enters retirement. Currently, 53% of people in the workforce have no pension, and 32% have no savings set aside for retirement. The number of traditional pension plans -- the kind that guarantee a set amount of money for life and that have propped up many of the pre-boomer generation -- has fallen to 29,651 in 2004 from 112,208 in 1985.
The average Social Security payout is $955 a month, $11,460 annually. The benefit can be more or less, depending on how many years you worked, how much you earned and the age you started taking payments. If your check is less than $579, you can get Supplemental Security Income. But that just brings your monthly income up to $579.
President Bush has proposed overhauling Social Security by allowing private investment accounts and indexing benefit increases to changes in consumer prices, rather than wages. But proponents and opponents disagree on how those changes would affect people who are totally dependent on Social Security.
Private accounts would give workers the potential to earn more on their savings than they would get from Social Security, proponents argue. And while tying increases to consumer prices would slow the growth of payouts over time, the bottom third of income earners would be exempt from that provision, says Michael Tanner of the Cato Institute, a conservative think tank.
Opponents argue that people would have to get a return of more than 3 percentage points above the inflation rate to benefit from private accounts. "The president's proposal would reduce benefits for people living on Social Security and subject what was left to substantially greater risk," says Jason Furman, senior fellow at the Center on Budget and Policy Priorities.
Getting there
How do you wind up with nothing but Social Security? Cindy Hulsey, a case worker for the Area Agency on Aging of Northwest Arkansas, says about half of her 65 clients live on nothing but Social Security. "They tended to have lower-paying jobs in their working careers, the ladies were homemakers or the husband was a farmer," she says.
"I've been a jailer, a deputy sheriff, owned a taxi and drove it, too," says Faye Hickman, 79, of Harrison, Ark., one of Hulsey's clients. She also worked 30 years for Tyson Foods, the giant meat-packing company. "You could go into the pension or the stock," she says. "I went into the stock." Tyson stock fell to $7.28 in March 2003 from nearly $25 in 1997. Her money soon evaporated.
Today, she lives on $888 a month, $146 of which goes to her mortgage. She gets an additional $20 in food stamps. "It is tight," Hickman says.
Rathbun had retirement savings. She got a lump-sum payout from the hospital where she worked. "I went through that when I first got sick," she says. "It didn't take long."
Kenny Fewell, 63, of Leesburg, Va., was just hitting his stride as a heavy-equipment operator when he fell into a diabetic coma at age 49. That ended his career driving dump trucks and other big equipment: For safety reasons, the state took away his license.
"We never did have much savings," he says. Being laid off took care of the savings he did have, and diabetes took care of the rest of his working career. Now, he and his wife, Nancy Ann, 56, also a diabetic, get by on his $998 Social Security check. They pay $188 a month for their subsidized housing.
"People say you can work with diabetes," Fewell says. "Some can and some can't. I've got a real bad case." Fewell has neuropathy that affects his hands, causing numbness, pain and weakness.
For a while after he was laid off, he reconditioned lawn mowers, getting $30 to $35 apiece. But he can't do that anymore. He mainly stays in bed, trying to avoid getting diabetic sores.
"It gets boring sitting at home, staring at four walls," Fewell says.
Nancy Ann Fewell worked for a doctor, doing filing and domestic work. She paid her own Social Security, but until she's declared disabled, she won't get any payments. "Her feet swell up, and she has tendonitis," he says.
Marnie McDonough, an Atlanta social worker, says many of her clients are single, African-American women who had menial jobs -- as maids and housecleaners, for example. "The families they worked for didn't pay into Social Security for them," she says. "And the women didn't earn much as domestics and were more concerned about putting food on the table."
It's not easy
Getting by on nothing but Social Security isn't easy. "Unless you're living with relatives, it would be very difficult," says Alexandra Armstrong, a Washington, D.C., financial planner.
Start with food. Rathbun says she's had to pinch pennies most of her life, so she's used to it. "I was raised during the dirty '30s, when you learned to manage," she says. "I cook from scratch and don't use a lot of prepared food." She grows vegetables in her small backyard garden and watches for sales. "No frivolities," Rathbun says.
The Fewells get a box of groceries once a month from Reston Interfaith, a local charity, although some of the food isn't suitable for diabetics. Eating at charity dinners isn't much of an option. Fewell's neuropathy makes his hands shake, and he says it's embarrassing to eat in public. "We went to a potluck dinner, and my shirt looked like I was a pig," he says. "We don't go out much."
Beyond food, medicine looms as the biggest problem for many of those trying to get by on Social Security.
Hickman is fortunate because she beat cancer. "Whatever can be cut off has been cut off," she says. But the 79-year-old also has heart problems and asthma. Hulsey arranges for her to get her heart drugs free from the manufacturer, although Hickman frets that the program might end this year.
Fewell, too, gets some of his drugs from the manufacturer, although he says it can take two months or more to get them. But because he needs as much as 75 units of insulin twice a day, he puts up with the wait and keeps his $600-a-year Medicare drug allowance for emergencies.
Because it's so difficult to live on Social Security, a primary challenge for many is finding people to help them untangle the maze of government and private programs available.
For some of the elderly, just admitting they need the help is tough. "They are proud people," says Hulsey. "They want to live independently for as long as possible."
Many times, they never call. "We find them because other people call," says Ken Johnson, director of senior respite services in Columbia County, Ore.
One reason they hold on: They don't want to have to depend on Medicaid, the government's health program for the poor. If they get Medicaid, they can't have much else. Johnson says that in Oregon, if you go on Medicaid, the state can get reimbursed by your estate when you die, leaving your heirs with little. "People want to leave an estate when they pass on," Johnson says. "They hold on to the desperate last."
For some, it's a lifeline. Recipients of Supplemental Social Security Income must have less than $2,000 in assets to qualify for Medicaid. But Medicaid will pay for some of their drugs, and that can make a huge difference in their standard of living. "Sometimes those people are better off than those who are just above the guidelines for Medicaid," Hulsey says.
Many of those living on Social Security alone are looking forward to the new prescription-drug benefit from Medicare, which kicks in next year. "It's so wonderful to be able to tell them that they will get a free drug premium," says McDonough, the Atlanta social worker. "Once they hear that, they're thrilled."
A good social worker -- often found through a state's programs for the elderly -- can be a godsend. "My case manager is wonderful," Hickman says of Hulsey. Hulsey helps Hickman and others take advantage of local programs for seniors. One, called Share and Care, provides free groceries once a month. The homebound aged can get meals delivered via Meals on Wheels, a charity, or through a local senior activity center.
Families help sometimes. Rathbun relies on her daughter, Lucille Masterson, to drive her to a clinic for medical treatment. "It helps to have a driver," she says. "I used to do it myself, but I'd be pretty darn tired by the time I got home."
But not everyone has family available to help. And when they are available, dealing with a financially strapped and often ailing elderly relative can be hard on a family, McDonough says.
In some cases, a son or daughter will quit work to help the parent -- which means both are living on the parent's Social Security, or some combination of Social Security and government assistance.
The task of caring for an elderly family member is exhausting, Johnson says. "A lot of times we have wives taking care of husbands, sons and daughters taking care of moms and dads, and we try to find relief for the primary caregiver."
Skeptical of private accounts
Many seniors are split on Bush's proposal for letting workers invest a portion of their Social Security taxes in private investment accounts in the hopes of earning more. Because of her losses in Tyson's stock, Hickman is skeptical of that plan. "That's crazy," she says.
Charles Goss, 75, of Leesburg, Va., isn't enthusiastic about the idea, either. He and his wife, Annie, live on an $840 monthly Social Security check. He says he wouldn't want to risk getting any less. "It pretty well takes what I get to live," he says.
Rathbun thinks future generations will need some help. "If they're planning on Social Security, they will need an investment account of some sort to help them," she says.
Those who are getting by on Social Security have some advice for those who haven't retired yet: Save. "Try and save all the money you can," says Kenny Fewell. "When you're on Social Security and disability, it's hard to get anything else."
Be cautious in your spending. "You've got to manage close," Hickman says. "You're going to have to pinch pennies."
And don't kid yourself. "It's rough living on nothing but Social Security," Fewell says.
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