How much does the average American family earn in 2020? Why household income figures are going to get shattered because of Covid-19 and 65 million Americans on Social Security
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The typical American family was already having a tough time prior to Covid-19 and many were living paycheck to paycheck. Surveys conducted prior to Covid-19 showed that 1 out of 3 Americans were not able to sustain an emergency expense of $1,000. As many of you know, even a small illness would shatter this amount. This was before the global pandemic and now, we have over 36 million Americans that are unemployed or collecting unemployment insurance. That is a problem but we now have compounding issues hitting all at once. Do you know that we now have 65 million Americans receiving Social Security benefits? That is roughly 20% of the entire living population in the US, including babies and kids (they clearly don’t pay taxes). While we hear the horror stories, how much does the typical family earn in 2020? Let us dig into the data.
Median household Income 2020
Household income figures are hard to nail down. They usually lag the market by a year and don’t reflect sudden changes. Covid-19 has been the swiftest change to our economy in modern history so we won’t have clearer figures until late 2020 and 2021.
So let us take a look at household income figures first:
The median household income in the US is $63,179. Keep in mind this is 2019 data when the overall economy was doing much better. How does this break down on a monthly basis?
I ran these numbers for a married couple with two children. Take home monthly pay amounts to $4,468 after taxes. Let us see how far this money goes with some of the larger expenses people have:
Monthly housing payment: $2,000
Groceries: $1,000
Car payments: $500
Gas: $200
Utilities: $300 ($100 electricity, $70 Gas, $50 water, $80 cable)
Health care: $400
Total: $4,400
So what about cell phones? What about saving for retirement? What about putting money away for college when some universities charge $50,000 a year in tuition right now? And I want to emphasize this is before Covid-19 hit. The typical household income has been hit extremely hard with this crisis.
Social Security
We also have 65 million Americans depending on Social Security:
This is a very high number. What was startling from some reports is that half of those receiving Social Security rely on it as their only source of income. So what happens if unexpected expenses come up? The typical payout for a beneficiary is $1,503 per month. That does not go far.
We also need to realize that Social Security funds are paid by actual working people. With 30 million Americans unemployed or on unemployment insurance, the system is being taxed very heavily.
Key takeaway? The economy needs to bounce back quickly or we face some incredibly deep structural deficits and while the Fed is digitally printing money, we do face serious challenges to our financial system beyond what we are dealing with now. There is an extended unemployment insurance payout that ends next month. There were structural issues that we are going to face and it appears we are going to need to juggle multiple things at once.
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cindi heath said:
Social security is not an entitlement… in 1987, the U.S. gov’t doubled SS. But that was O.K. we were told, as the taxes were to placed in a lock box. So, what happened? The worthless swine of the Congress and senate, gave a nod and a wink as the as the U.S. treasury took the money and wrote worthless I.O.U.’s. An actuary I know, ran the numbers…The theft was to the tune of 120 billion dollars a yr., stolen. The ‘Trust Fund’, should be 3.7 trillion in the black. The gov’t has been borowing, -yes if you can believe it- about 120 billion a year to cover their fiduciary responsibilities…SS is NOT an entitlement.From the beginning of O’bama’s 2nd presidency, the borrowing started. The Congress and Senate are responsible. They deindustrialized the USA, and yet tried to run the circus while destroying the wages of middle America, by flooding the country with legals and illegals. The USA, shelled out 220 billion in expenses for illegal immigrants in 2019. Big deal, that illegals payed 8 billion in taxes. California’s budget was 125 billion in 2018. California paid 25 billion caring for illegals.Just as Covid 19 was done by design, so was the destruction of SS by stealing 100 billion a year for the past 33 years. The USA is the Titanic, and it’s taken on massive water and is slowly sinking into the murky. Jesus will remove His own this fall, before TsHtF…
June 12th, 2020 at 7:27 pm -
Bobby said:
Following up on Cindi Heath’s comment,
Not only do illegals, and legal immigrants compete with Americans for jobs and public infrastructure, services, welfare etc, but every dollar they send back to their country, is a dollar not spent in local businesses and which is not leverage by the multiplier effect, being spent over and over again, taxed and spent, equaling 7 dollars.
“Apr 8, 2019 Immigrants In The U.S. Sent Over $148 Billion To Their Home Countries In 2017”
That’s 7 times 148 Billion, not spent, not taxed, not keep local. That’s another cost of immigration. $1,36 Trillion$. More than half that spent on all Americans direct stimulus payments of $1200.
Al Quada is not the enemy. The terrorists are in congress, the non profits and in the streets, demanding open borders.
June 14th, 2020 at 6:18 pm -
Blackvorte said:
Car payment= $0, working from home +10yr old honda, toyota, etc
Replace cable with cell phone bill
Groceries= $500, cut it in half. even lobster is $4.99/lb as all the restaurants were closed, no demand
thats $1000/month in savings
easy $12k at year
also tax refund is at least $5k with 2 children + standard deductions
need to bank this and go to the park, not disneyJune 16th, 2020 at 3:01 pm -
Ronny said:
The US is run by a bunch of criminals in the executive branch and the haughty bellies of congress that care only about lobby money. The US is screwed and it can only get worse. Getting off the gold standard was great for the baby boomer generation” imposing our military might on other countries. How dreadful. But it is coming to an end and a new sort of currency or world order will have to come to fruition. America reminds me of the fall of Rome which was engulfed in debt before the barbarians invaded.
July 19th, 2020 at 6:07 pm