Benefits Snapshot

Social Security reaches almost every family, and at some point will touch the lives of nearly all Americans.

Social Security helps not only older Americans, but also workers who become disabled and families in which a spouse or parent dies. Today, about 170 million people work and pay Social Security taxes and about 60 million people receive monthly Social Security benefits.

Most of our beneficiaries are retirees and their families—about 38 million people in 2011.

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 much more than just 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. The tax money is used 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 is not held in a personal account for you to use when you get benefits. Your taxes are being used right now to pay people who now are getting benefits. Any unused money goes to the Social Security trust funds, not a personal account with your name on it.

NOTE: On June 26, 2013, the Supreme Court issued a decision regarding Section 3 of Defense of Marriage Act (DOMA). The Office of the General Counsel (OGC) and the Department of Justice are currently interpreting the decision.