Many workers wonder if they will receive Social Security payments in retirement equal to what they paid in throughout their career. They are also worried about the program’s long-term financing. Here is what you are getting for the Social Security contributions you make.
Your employer pays a portion of the total Social Security taxes you owe. In most years, employers match, dollar for dollar, the Social Security taxes you pay into this government program. In effect, you are getting 100 percent of the benefit by sharing 50 percent of the cost. Even if the government decides to cut benefits to 65 percent of current rates, you would still come out ahead.
Society Security works like insurance. There are disability and survivor benefits embedded into Social Security. So this program actually works like life and disability insurance in that you will get payments if you become disabled and your family will get payments if you die. Also, knowing that you will get a guaranteed check every month in retirement until you pass away is a very comforting fact. You will never completely run out of money in retirement because you will continue to get Social Security payments.
Despite popular belief, Social Security is not going away. Social Security is a pay-for-yourself system. To cut this program entirely would be politically unpopular. While there is a possibility that you could receive payments below current levels in retirement, the total elimination of the Social Security program is extremely unlikely.
The program is responsible for making society more pleasant. Social Security contributes to our society in many ways beyond economic activity. In some countries around the world the elderly are living in poverty. Some people ended up that way due to uncontrollable circumstances, while others ran out of money because they didn't make the right financial moves while they were young. With Social Security, most seniors in our country receive a guaranteed check every single month. While the amount of money that they are getting probably won't completely meet their financial needs, the cash keeps a good portion of our older citizens off the streets.
David Ning runs MoneyNing, a personal finance site aimed at helping others change their habits for a better financial future. He suggests that everyone to sign up for an online savings account to get more out of our hard earned money.