Social Security Administration

Social Security: 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.
We want 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 have already 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.