Verhovayak Lapja, 1949 (32. évfolyam, 1-12. szám)
1949 / Verhovay Journal
September 21, 1949 Verhovay Journal YOU CAN’T LIVE ON OLD AGE PENSION — Savings necessary to complement Social Security Benefits provided by Life Insurance. — When the Social Security Act went into effect, many people were under the impression that the new law will eliminate, once and for all, all the worries and fears of futurer’s uncertainties. Fathers no longer will despair over the thought of what would happen to their loved ones if they should be taken from them before their time. Workers no longer will face old-age unemployment with the horror of starvation haunting their minds. Social Security benefits will protect the breadwinners’ survivors in case of early death and furnish a subsistence to them, too, upon attaining the age of sixty-five. The term “Security itself tended to strengthen their belief that the government will take care of them and their next-of-kin in any eventuality. No doubt, the Social Security system is a great boon to the nation. But, since 1937 when the Act went into effect, everybody had opportunity to find out that it does not justify exaggerated expectations. It has became a generally recognized fact that anyone depending on social security benefits alone, must be prepared to face a future of unlimited deprivations. That this is no exaggeration like the expectations aroused by the institution of the Social Security system, is proved by the Social Security board’s own releases of figures covering benefits paid under the Social Security Act early this year. This is the picture revealed by the releases: 710.000 retired workers draw around $25 a month. 220.000 wives of retired workers draw around $13 a month. 135.000 widows with dependent children draw around $20 a month. 460.000 children of deceased workers draw around $12.50 a month. 125.000 aged widows of deceased workers draw around $20 a month, and 7.000 aged parents of deceased workers draw around $13.50 a month. Do these benefits spell “Security” for the retired workers? For their wives? For their widows and children? For their dependent parents? Of course, not! The fact is, there are millions today who, though having attained the age of 65, cannot afford to retire because even at the lowest wages, working only a day or two each week, they can earn more than the social security benefits amount to, and, as a result, they are forced to forego the benefits due to them under the law, toward which they and their employers have made substantial contributions since 1937. Nor can they ever hope to recoup such losses, because the law cancels eligibility for benefits not claimed within the prescribed period of time. And those who are forced to retire due to disability or unemployment, face heartbreaking hardships and dependency on the charity of their children, relatives or society. Much is made of the prospects of increased social security benefits, but the fact is that expectations again are unwarranted by the facts. Even under the proposed schedule of benefits a retired couple cannot hope for' more than $65 a month, at the best, an amount that proved insufficient in the time of the sadly remembered WPA, when prices were 60% under today’s level. Yet, economic experts agree that wages and prices will never retire to the-same level and, as1 a resilit, even the increased benefits will prove far from sufficient for the minimal needs of the widows and retired workérs. Anyone iust slightly acquainted with economic facts must realize that social security benefits cannot, nor ever will, provide all-around Security for the wage earner. Especially not in a rapidly ageing population like that of the United States where the continually growing population of those over 65 will put an ever increasing burden upon the proportionally decreasing group of wage earners. Common sense demands the frank recognition of the fact that social security benefits will never fully cover man’s most elementary needs. Social security benefits will hardly ever amount to more than an economic crutch along with which some other support will be an absolute necessity. In other words, the widows of deceased workers and the retiring workers must have some capital with which to complement the social security benefits. If a widow is left, or a worker retires, with a capi- • tal of three, four or five thousand dollars, then, with careful management, these savings, together with the .social security benefits, may provide them with the necessities of I life. Without social security benefits, such capital would soon be exhausted. Indeed, the benefits provided under the Social Security system are a great help. But they are no more than just a help that would be entirely insufficient for the most elementary needs without a substantial capital or some other source of revenue. qi, With this in mind, a man of the age of 35 can do no better than to purchase a / Thirty Year Endowment insurance certificate. If he should -die before attaining the ‘age of 65, his widow will receive the entire face amount of the policy, which, together wjth the survivors’ social security benefits, will assure her and their children of life’s necessities, provided, of course, that the policy is for an adequate amount. And if he should attain the age, of 65, he himself will be the recipient of the proceeds of the policy which, if contracted for a sufficiently large amount, will complement the old age benefits. And if a man already has attained the age of 45 without having made some such provision for complementing the social security benefits with the certain capital provided by life-insurance, he can do no better than to purchase a Twenty Year Endowment which, will be payable to him at the age of 65 or to his beneficiaries in the event of his death prior to that date. Let’s not kid ourselves. There is no such thing as absolute security, no matter how much everyone desires and demands it. Not even capitalists have absolute security, because history proves that more fortunes have disappeared overnight than have been made during man’s lifetime. Insur- . ance is here to stay, regardless of what direction the development of the Social Security system may take. And a man who does not want to blindly lead himself and his family into the uncertain and insecure future, will only dis- ' charge his duty toward himself and his loved ones by providing the necessary economic prop, to complement the prospective social security benefits, by purchasing an adequate amount of Life Insurance which, both as an estate and a savings plan, is completed and certain from the time the first payment has been made thereon. Let no economic fairy tales put our conscience to slumber. Social security by general taxation is doomed without life-insurance by self-taxation. Society can never provide as much for a man as he can provide for himself. He who puts Security Analyst Gets Some Answer We Get — From an address before the New York Society of Security Analysts by Eugene Habas, Vice-PVesident of Pugh W. Long and Company. — In the past century every adult American has had to contend with a living cost “pinch” during his lifetime. Although the 60-70% increase in living costs since 1933 may strike us individually as a painful and unique experience, the fact is that the cost of living has increased fourfold since 1850. Even in the “good old days” people had to readjust themselves to sharp increases in costs of living — greater increases than we have experienced in the past 15 years. However, there are more important and useful lessons to be learned from this history of living costs trends. First, living costs have pursued an irregular upward path for a century and there is little reason to suppose that this main trend will be disturbed in years to come. Second, after each major advance, living costs never returned subsequently to where they were before the advance started. In the depression of the early 1920’s livings costs declined by only 15% (after having doubled in the preceding five years.) It took the depression of the early 1930’s to bring about another 25% decrease in living costs. If history is any guide, clearly it will make only a little difference whether a.) the latest rise in living costs “levels out” in the next year or two, b.) living costs turn down in this period, or c.) several years go by before they turn down. The important thing is that there will be no returning to the price leyels of 10 to 15 years ago. Consequently, personal financial plans for such goals as the education of children, personal travel, the purchase of a home, the building of an estate or retirement fund — all these will now require more dollars than in the i'930’s. And let’s not forget that people will need more money anyway, simply because they live longer today. Solutions are difficult to perceive. The obvious ones are a greater personal effort to save for the future and more Life Insurance protection. — Commercial and Financial Chronicle. — PAGE 11 There never was a heart truly great and generous that was not also tender and compassionate. — Robert Smith. all his reliance on the re(sources of society, actually weakens' and undermines society. The authors of the Social Security Act never intended to do away with Thrift and Providence. They never intended the Social Security system to be much more than an economic crutch. No self-respecting person will intentionally condemn himself to walk on crutches through the years of old age. He will recognize the Social Security system for what it is and he will continue building his future by doing without what can be done without, which is the only way to provide for whatever security is possible for man.
