The purpose of this paper is to analyze social security so as

to show the reader what makes it beneficial to us today. .

Throughout my life the words social and security have meant

little more to me than the representation of a small blue card in my wallet,

a consistent and increasingly significant deduction of funds from my weekly

pay-check, and a vague academically-instilled recollection of the potential

for long-term future benefit. In fact, it was not until I researched

pertinent material for this particular project that I truly learned how

markedly beneficial social security will be after my eventual retirement.

Reflecting on precisely how ignorant I had been to the issue prior to my

investigation, I realized a tragic irony which exists quite commonly within

our society today; young people are not taught to save for retirement.

I think that many of my friends do not even think much of saving for

their college graduation, let alone for their retirement. Eventually,

however, most of us will reach a point in our lives where work shall come to

an end, yet the existence of living expenses will not. Social security, many

of us find out; will provide us with a monthly check at this point. What we

do not realize, however, is that this amount is not intended to be used as

our sole source of income.

Unfortunately, the tragic irony is that many of us reach retirement and

realize too late how impossible it would be to live by no other means except

social security. The reality is, that the program is but one benefit, one

addition, and one financial supplement. Its intent is to be combined with

other savings, IRA's, retirement funds and the like. Many senior citizens

retire not fully realizing this and consequently, they are forced to seek

part-time employment to supplement their income. This defeats the purpose of retirement

all together. Since people often expect social security to pay for all or most

of their living expenses, the disappointment that comes with

retirement leads them to maintain negative feelings against the social

security program which is actually at no fault whatsoever.

Once you have reached your retirement age you must notify your employer and the

government agency responsible for paying you benifits. This is the

Social Security Administration. Arrangements must be made to carry private

health insurance over into retirement, and applications must be filed for

government health coverage. While social security is of

great financial benefit to retirees, it must not be mistaken as a financial entity

on which people can live without any other sources of income or savings.

Rather, social security income should be supplemented by money from

pensions, investments such as Individual Retirement Accounts

(IRAs) or other means.

In addition to providing financial aid to the retired, social

security has two other aspects: Should the worker die before retirement,

benefits go to survivors: to widows or widowers and to children until they

reach a specific age, usually 18. Should a worker become disabled, income

maintenance is provided. Temporary injury, however, is usually covered by

workmen's compensation programs.

In the United States social security is a contributory system. Workers

and their employers both make contributions in the form of payroll taxes. A

few countries maintain universal pension plans paid from general revenues.

Other countries have assistance for those not covered by social security or

for those whose benefits are inadequate.

There are some exceptions to social security coverage. Government

workers, including the military, often have their own pension plans. The

self-employed and those who work for nonprofit organizations have also been

excluded, but in the United States this policy has been changing.

. In the United States there was no general

government-supported health plan until the passage of Medicare and Medicaid

in 1965 as amendments to the Social Security Act. (The exception was the

medical service offered through Veterans Administration hospitals.) Medicare,

however, is not a general health plan available to the whole population. Its

benefits are for retired persons who have been part of the social security

system. And Medicare does not cover the whole cost of hospitalization or

other services. Therefore, similar to the notion that retirees must not rely

solely on income from social security, they also must not rely solely on

related health insurance.

The social security benefit formula is designed so that if an individual

who maintains average earnings all through their working life and retires at

full retirement age, (currently 65), will have a social security benefit

equalling approximately 4 0% of their earnings just prior to retirement. If,

however, a retiree had minimum wage earnings all of their life, social

security