Social Security was created with the intentions of being supplemental income for eligible beneficiaries to use as retirement assistance. It’s also geared for those who are unable to work due to disability. Over the years, that intention has completely changed. Now it’s viewed as a national retirement plan, but this is far from the intention. Due to these changes, the idea of Social Security benefits being unavailable when future retirees need them is a clouded concern.

Understanding Social Security

Every person receiving income is required to pay Social Security taxes and every person paying Social Security taxes can get benefits when they retire. Social Security benefits aren’t based on financial need, they’re based on average lifetime earnings and the amount of time you’ve worked(1). Bottom line, you must earn enough Social Security credits to qualify for any benefits.

Social Security benefits extend beyond retirement. Social Security also includes disability benefits, young survivor benefits, death benefits, and Medicare. According to the Center on Budget and Policy Priorities, one-fifth of Social Security beneficiaries receive non-retirement related benefits.

Social Security in Retirement

Once you retire, you have the ability to access and use your Social Security benefits. What you receive on a monthly basis depends on the period when you made the most money during your work history. The monthly benefit, however, can fluctuate from time to time to keep up with inflation.

With the shift in the responsibility of retirement contributions from the employer to the individual, more individuals are relying on Social Security benefits. Many employers have moved away from offering traditional defined-benefit pension plans, which guarantee a certain benefit level upon retirement; and have moved toward defined-contribution plans (such as 401(k)s), which pay a benefit based on a worker’s contributions. Because of this, Social Security will be most workers’ only source of guaranteed retirement income that is not subject to investment risk or financial market fluctuations.

Social Security fluctuates and the wavering concern about benefits not always being available for future retirees persists. It’s important to have a retirement plan that doesn’t revolve around Social Security. The point is to know it’s there and understand its purpose. While not everyone uses the benefits available, it’s important to understand that it’s set in place for good reason.

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