Essay/Term paper: Social security

Essay, term paper, research paper:  Economics

Social Security


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