Facts About Social Security Benefits

Pinnacle Personnel Services LLC  |  Debbie Hatch 

I don’t work for Social Security.

I don’t run Social Security.

I’m not responsible for Social Security, and I’m not a politician, but I do teach about the program in my retirement seminars and know, for a fact, that most people don’t really understand the system.


Memes like this one are incredibly simplistic, do not fairly represent the program, and those who create them (and share them), clearly don’t understand how Social Security works, why we have it, or what it really is.

Like so many things today, it’s quick and easy to complain.

It’s popular to scream, “that’s my right”.

“Congress is responsible for all of our problems”.


To be clear, I’m not a fan of either party. I don’t like politics.  I think many foolish and potentially dangerous decisions have been (are currently being) made. Trust me.

This post isn’t in support of Congress. It isn’t about politics. It isn’t my opinion.  It’s merely about education.

I would like to explain that the blame game isn’t the biggest issue with our Social Security.


Fact:  Like so many things, that’s just a little too simplistic.




Here’s some background.  Social Security was created on 14 August 1935, by President Roosevelt, as a means to get the country back on track after a depression.  Amendments to the program extended benefits to the spouse and minor children of retired workers; workers who become disabled; families in which a spouse or parent dies, and most recently medical health coverage (Medicare was created in 1965).    Currently, we can draw our own benefits, based on what we paid in, OR we can draw half of our spouse’s benefits OR, if we were married for at least 10 years, are divorced and didn’t remarry, we can receive half of our ex-spouses income.  In fact, there can be multiple people drawing benefits against what only one worker actually paid into Social Security.




Fact:  What family members receive does not impact the amount the worker him/herself receives from the program.




Fact:  In 2016, 51% of the private sector workforce had no private pension coverage and 31% of workers reported that they and/or their spouse had no savings set aside for retirement.  Among elderly Social Security beneficiaries, 48% of married couples and 71% of unmarried persons receive 50% or more of their income from Social Security.  21% of married couples and about 43% of unmarried persons rely on Social Security for 90% or more of their income.


It’s my benefit. I paid for it!


Yes, and no.  The Social Security program IS funded through the Federal Insurance Contributions Act (FICA) tax.  This is a dedicated payroll tax with you and your employer both paying 6.2% of your wages, up to an annual taxable amount.  That was $118, 500 in 2016; it was raised to $127,200 for 2017.  If you’re self-employed, you pay the entire 12.4% but can deduct half of the self-employment tax as a business expense.  Under the law, Social Security is financed by this designated tax, and any money that isn’t paid out in benefits is used to buy U.S. government bonds that are held in the Social Security Trust Fund.


It’s true that “the government” took money from the program – and it’s very easy to say “it shouldn’t have. They had no right and they need to put the money back!”


I agree they “shouldn’t have” but, the programs funded with the money that was removed from Social Security were being publicly demanded at the time too. That’s a lose lose situation! And where do we get the money to “just deposit into Social Security”?  Just “paying that back” doesn’t make the program solvent anyway.


Fact:  If “your” money was just put into a trust fund for you and you only received benefits until you had withdrawn all of your money, you’d likely run out before your life was over. Most Americans receive far more than they every paid in.  In 1935, life expectancy averaged age 61.7.  In 2015, life expectancy in the US averaged 78.8.  I personally know several people in their 90s.  We’re living longer.  What a great and wonderful thing!  Yet, when we talk about “lifetime benefits” there is a cost for this longevity.  When you’ve received “your” money, now what?  Are you out of the program, looking for work, in your 80s?



Additionally, if we’re basing benefits on what people personally paid in, we’ll need to stop providing benefits to children, widows/widowers, and disabled workers too.   That should be a popular change.




Fact:  While many of these beneficiaries never paid in,

  • 3 million dependents received $2 billion from Social Security in 2016
  • 8.8 million disabled workers, and 1.8 million dependents received $10.95 billion from Social Security in 2016
  • 6.1 million survivors received $6.8 billion from Social Security in 2016.


The 41.2 million retired workers collecting $56 billion in 2016, can stay – but only until they receive a refund of the money they paid in.  Then, they’re done.  Oh, and by 2035, the number of Americans 65 and older will increase from approximately 48 million today, to over 79 million but “Social Security would be fine if Congress would just leave the money alone.”

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