A Simple Concept
Social Security reaches almost every family, and at
some point, touches the lives of nearly all Americans.
Social Security helps older Americans, workers who
become disabled, and families in which a spouse or
parent dies. Today, about 167 million people work and pay
Social Security taxes and about 59 million people receive
monthly Social Security benefits.
Most of our beneficiaries are retirees and their
families—about 42 million people.
But Social Security was never meant to be the only source
of income for people when they retire.
Social Security
replaces about 40 percent of an average wage earner’s income
after retiring, and most financial advisors say retirees will
need 70 percent or more of pre-retirement earnings to live
comfortably. To have a comfortable retirement, Americans
need more than Social Security. They also need private
pensions, savings, and investments.
The Social Security Administration wants you to
understand what Social Security can mean to you
and your family’s financial future. This publication,
Understanding The Benefits, explains the basics of the
Social Security retirement, disability, and survivors
insurance programs.
The current Social Security system works like this:
when you work, you pay taxes into Social Security. We use
the tax money to pay benefits to:
• People who already have retired;
• People who are disabled;
• Survivors of workers who have died; and
• Dependents of beneficiaries.
The money you pay in taxes isn’t held in a personal
account for you to use when you get benefits. We use your
taxes to pay people who are getting benefits right now.
Any unused money goes to the Social Security trust funds,
not a personal account with your name on it.
