Social Security


Social Security provides vital income protection to workers and their families. Benefits are indexed annually for inflation. Unlike savings accounts, which can be run down, Social Security benefits last a lifetime. Social Security’s progressive benefit formula ensures that those with low lifetime earnings receive proportionately larger benefits. Social Security plays a crucial role in reducing poverty among older people, particularly women and racial and ethnic groups that have experienced discrimination. Without Social Security, 41 percent of all older Americans would be in poverty. Instead, only 8.8 percent were below the poverty line in 2015.

Social Security is the primary source of retirement income for most Americans. About half of people age 65 and older depend on Social Security for most (more than 50 percent) of their retirement income. About one-quarter rely on Social Security for all or nearly all of their income (Figure 4-1). Among poor households headed by someone of retirement age, Social Security is virtually the only source of retirement income.

Social security as a percentage of family income* of people age 65 and older, 2015


Social Security is legally defined as an entitlement because it is a mandatory spending program in which benefits are provided to all who qualify. Benefits are based on people’s average earnings. Social Security’s benefit formula is progressive. This means that for people who earn very low wages throughout their career, Social Security replaces a higher percentage of their earnings (56 percent) than for career high-earners (25 percent).


Social Security is more than a retirement program. It is a social insurance and family income-protection plan. It provides a guaranteed floor of income for spouses and dependent children of wage earners who die or become disabled during their working lives.

Found in Social Security