Social Security was created in 1935 to provide income security for older people by pooling resources through mandatory payroll taxes. It aims to prevent financial disaster for retirees and ensure basic protection for those in need. Social Security benefits individuals across their lifetime through retirement benefits, disability insurance, and survivor benefits. It is the primary income source for many retirees, with over 50% of beneficiaries relying on it for at least half their income. While it faces funding challenges, proposals to reform it focus on options like raising taxes, adjusting eligibility ages, or reducing benefits.

1. Social Security
“The fundamental concept of social security is that individuals pool
their resources in order to spread economic risks. Its not about
wealth building, but a shared sense of responsibility for the income
security of all older people.” (Hooyman, pg. 703)

2. * Created in 1935, the Social Security Act
sought “to form a system of maintenance
for older persons to protect against
financial disaster. A secondary purpose
was to ensure a basic level of protection
for the neediest older adults.” (Hooyman, pg. 703)
A more recent addition to it’s purpose is to aid those, regardless of age, who face a
sudden loss of income.

3. Social Security has four separate trust funds:
1. Old Age and Survivors Insurance (OASI)
2. Disability Insurance (DI)
3. Hospital Insurance (HI), which is funded though
Medicare
4. Revenues for the supplemental insurance
portion of Medicare
These trust funds are financed by mandatory contributions of
employers and employees though payroll taxes, and income based
on current tax revenues. (Hooyman, pg. 703)

4. * Social Security is based on earned rights as a result of paid work over a
lifetime.
* It was intended as a “minimum floor of protection.”
* It is the major source of income for many elders.
23% of people 65 and older live in situations where the
family depends on Social Security for more than 90% of
their income. 27% depend on at least half of their income
coming from Social Security. It accounts for 95% of
income for the lowest-income homes of older adults and
only 26% of those with the highest income. (Hooyman, pg. 704)

5. Comparison chart between 1962 and today, where social security
benefits make up 97% of married and non married, 65 and older,
persons incomes. (Social Security Administration)

6. Social Security benefits individuals of all ages across
a lifetime, not just elderly adults:
•Makes sure there is basic protection for the neediest, no matter
what age.
•Every worker that contributes to SS, regardless of age, has
disability insurance for workers with major disabilities that
prevent them from being able to work, and life insurance for
children of deceased workers.
•SS gives income to those who experience a sudden loss of
income.
•It brings more than 1 million children over the poverty threshold.
(Hooyman, pg. 707)

7. Beneficiaries, by Age
Social Security Administration, December 2009

8. “In 2008, 88% of married couples and 86% of non-married
persons aged 65 or older received Social Security benefits.
Social Security was the major source of income (providing at
least 50% of total income) for 52% of aged beneficiary
couples and 73% of aged non-married beneficiaries.
It was 90% or more of income for 21% of aged beneficiary
couples and 43% of aged non-married beneficiaries.” (social security
Administration)

10. Critics and shortcomings of Social Security
* Some policy makers believe that social security is difficult financially to
maintain.
* Some fear for the future of Social Security for the next generation.
* Current projections for the Trust Funds are that they will continue to grow
until 2016 and then the benefits going out with exceed the money coming in.
* The government borrows from social Security, giving it an IOU for later
repayment with interest.
•Privatization has been argued for the future of SS.
•(Hooyman, pg. 706-707)

11. The Future of Social Security:
There are many proposals for the funding of Social Security.
•Raising payroll taxes.
•Increasing the age of eligibility.
•Reducing benefits.
•Raising the retirement age for full benefits to 69,
and for partial benefits to age 65.
•Increasing the penalty for earl retirement.
•Increasing the number of employed years to
receive benefits from 35 to 38 or 40. (Hooyman, pg. 710)

12. References:
Hooyman, Nancy and H. Asuman Kiyak. 2011.Social Gerontology: a
Multidisciplinary Perspective. 9th ed. Boston, MA: Allyn & Bacon.
Social Security Administration. 2010. Fast Facts and Figures about Social
Security. Office of Retirement and Disablity Policy. Online, April 2013.
http://www.socialsecurity.gov/policy/docs/chartbooks/fast_facts/2010/f
ast_facts10.html#chart13