Social Security is the foundation of economic security for millions of Americans—retirees, disabled persons, and families of retired, disabled or deceased workers. About 163 million Americans pay Social Security taxes and 59 million collect monthly benefits. About one family in four receives income from Social Security.
Social Security is largely a pay-as-you-go program. This means that today's workers pay Social Security taxes into the program and money flows back out as monthly income to beneficiaries. As a pay-as-you-go system, Social Security differs from company pensions, which are “pre-funded.” In pre-funded retirement programs, the money is accumulated in advance so that it will be available to be paid out to today's workers when they retire. The private plans need to be funded in advance to protect employees in case the company enters bankruptcy or goes out of business.
The average monthly Social Security benefit in July 2015 was:
- $1,336 a month for retired workers;
- $1,282 a month for widows or widowers over the age of 60;
- $1,165 a month for disabled workers;
- $1,979 a month for a disabled worker, spouse and one or more young children;
- $2,631 a month for a widowed mother and two children.
The maximum Social Security benefit for a worker retiring at the 2015 full retirement age is $2,663 a month.
For more information, see: