The importance of Social Security

By Mary Forsberg

Social Security is an American mainstay, as much a part of our culture as baseball, hot dogs and apple pie. Established in 1935, it now provides benefits to over 50 million people, about one in every six U. S. citizens. While three-quarters of those receiving benefits are retirees or elderly widow(er)s, 19 percent receive disability insurance payments and 4 percent receive benefits as minor children of parents who have died.

Social Security provides a guaranteed, progressive benefit that keeps with increases in the cost of living. By dollars paid, the U. S. Social Security program is said to be the largest government program in the world. It provides a foundation of retirement protection for nearly every American and its benefits are not means-tested. The near universal participation and the absence of means-testing make Social Security much less expensive (its administrative costs amount to just 0.9 percent of annual benefits) to administer than private retirement annuities.

Debate in Washington about how to reduce the growing federal deficit often turns to reducing social security eligibility and /or benefits. A recent report from Social Security Works and the Strengthen Social Security  campaign supports the importance of Social Security to families, communities and state and local economies.

Did you know in New Jersey:

• Social Security provides benefits to more than 1.4 million people.
• Residents receive Social Security benefits totaling nearly $20 billion a  year
• The median benefit received by a retired worker is about $15,500 a year.
• Social Security is the most important source of income for the 171,400 children living in “grandfamilies,” households headed by a grandparent or other relative.
• Social Security provides valuable disability and life insurance protection for most workers. Nationwide, an estimated 3 of 10 working-aged men and 1 of 4 working-aged women will become severely disabled before reaching retirement age.
• A 30-year-old-worker who earns about $30,000 a year and has a spouse and two young children, receives Social Security insurance protection equal to private disability and life insurance policies worth $465,000 and $476,000 respectively.

Social security has been one of the most important public programs for working family in America since the great depression and clearly provides a measure of security for the elderly, the orphaned and the disabled.

6 Comments

  1. Mary,
    As always you are right on point. It’s great to read you. Please keep up the great work.
    mike allen

  2. Carole Holden September 23, 2011 Reply

    Thank you for again pointing out the significant effects that Social Security has had since its inception in the l930’s. The plan to do away with it, I believe, comes not from the fact that it is going broke, which it isn’t, but from the ideology that government shouldn’t be in the business of helping alleviate poverty – or anything else. The cry of “starve the beast” is behind this view. It must not happen.

  3. Larry Cherchi September 23, 2011 Reply

    TO 50% OF SOCIAL SECURITY RECEIPTIANTS IT IS 90% OF THEIR INCOME [NY TIMES 3/2011]

  4. Ed Kranepool September 23, 2011 Reply

    Of course it only costs .9% to run, its a ponzi scheme. No money is ever invested for any future retirement. The program will never fail as there are always new folks joining in at the bottom to fund those nearing retirement. The real crime is that as a retirement plan, Social Security has had the effect of giving those most economically challenged a false sense that they don’t have to prepare themselves economically for their golden years. This economic injustice teaches these folks to spend every penny they have during their earning years, and worse yet, their spending habits likely teach them that “they can have it all today” resulting in their paying 20+/- credit card interest every month, greatly impacting their current quality of life. Social Security is robbing so many people of their economic opportunities today and those of their golden years.

  5. Ed — Can you please cite a study that supports the claim that those in the lower economic tiers spend more irresponsibly because of the existence of Social Security?

    Also, isn’t the fact the “the program will never fail as there are always new folks joining in at the bottom to fund those nearing retirement,” a BENEFIT of the structure? I think this comment contradicts the claim that it is a ponzi scheme. Those entering last in a ponzi scheme are going to get screwed, which is not what will happen with Social Security. But i get the point. “Ponzi Scheme” is a bad word.

Trackbacks for this post

  1. […] Social Security provides a guaranteed, progressive benefit that keeps with increases in the cost of living. By dollars paid, the U. S. Social Security program is said to be the largest government program in the world. It provides a foundation of retirement protection for nearly every American and its benefits are not means-tested. The near universal participation and the absence of means-testing make Social Security much less expensive (its administrative costs amount to just 0.9 percent of annual benefits) to administer than private retirement annuities. The full article is here… […]

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