Social Security is more than just a retirement program. It also provides important life insurance and disability insurance protection.

About 67 million people, or about 1 in every 5 U.S. residents, collected Social Security benefits in February 2024. While older adults make up about 4 in 5 beneficiaries, the other one-fifth of beneficiaries received Social Security Disability Insurance (SSDI) or were young survivors of deceased workers.

In addition to Social Security’s retirement benefits, workers earn life insurance and SSDI protection by making Social Security payroll tax contributions: About 96 percent of people aged 20-49 who worked in jobs covered by Social Security in 2023 earned life insurance protection through Social Security.

For a young worker with average earnings, a spouse, and two children, that’s equivalent to a life insurance policy with a face value of nearly $948,000 in 2023, according to Social Security’s actuaries.

About 90 percent of people aged 21-64 who worked in covered employment in 2023 were insured through Social Security in case of severe disability.

The risk of disability or premature death is greater than many people realize. Some 8 percent of recent entrants to the labor force will die before reaching the full retirement age, and many more will become disabled.

Social Security provides a guaranteed, progressive benefit that keeps up with increases in the cost of living.

Social Security benefits are based on the earnings on which people pay Social Security payroll taxes. The higher their earnings, up to a maximum taxable amount ($168,600 in 2024), the higher their benefit.

Social Security benefits are progressive: they represent a higher proportion of a worker’s previous earnings for workers at lower earnings levels.

Social Security benefits are progressive: they represent a higher proportion of a worker’s previous earnings for workers at lower earnings levels. For example, benefits for a low earner (with 45 percent of the average wage) retiring at age 65 in 2024 provide $15,477 a year, replacing about half of their prior earnings. But benefits for a high earner (with 160 percent of the average wage) provide $33,769, replacing about one third of prior earnings, though they are larger in dollar terms than those for the low-wage worker.

Many employers have shifted from offering traditional defined-benefit pension plans, which guarantee a certain benefit level upon retirement, toward defined-contribution plans such as 401(k)s, which pay a benefit based on a worker’s contributions and the rate of return they earn. Social Security, therefore, will be most workers’ only source of guaranteed retirement income that is not subject to investment risk or financial market fluctuations.

Once someone starts receiving Social Security, their benefits increase to keep pace with inflation, helping to ensure that people do not fall into poverty as they age. In contrast, most private pensions and annuities are not adjusted (or are only partly adjusted) for inflation.

Social Security provides a foundation of retirement protection for nearly all people in the U.S.

97% of older adults either receive Social Security or will receive it.

Almost all workers participate in Social Security by making payroll tax contributions, and almost all older adults receive Social Security benefits. In fact, 97 percent of older adults (aged 60 to 89) either receive Social Security or will receive it, according to Social Security Administration estimates.

The near universality of Social Security brings many important advantages. It provides a foundation of retirement protection for people at all earnings levels. It rewards personal saving and private pensions because it isn’t means-tested — it doesn’t reduce or deny benefits to people whose income or assets exceed a certain level. Social Security provides a higher annual payout than private retirement annuities per dollar contributed because its risk pool is not limited to those who expect to live a long time, no funds leak out in lump-sum payments or bequests, and its administrative costs are much lower.

Universal participation and the absence of means-testing make Social Security very efficient to administer. Administrative costs amount to only 0.5 percent of annual benefits, far below the percentages for private retirement annuities. Means-testing Social Security would impose significant reporting and processing burdens on both recipients and administrators, undercutting many of those advantages while yielding little savings.

Finally, Social Security’s nearly universal nature ensures its continued popular and political support; 79 percent of Americans oppose cuts to the program.

SSA administers one of the largest and most complex F ederal Government programs.  The Agency provides social insurance coverage to more than 153 million workers, the self-employed and their families.  The Old Age and Survivors Insurance (OASI) and the Disability Insurance (DI) programs (commonly known as Social Security) are based in Title II of the Social Security Act.  More than 48 million persons received monthly Social Security benefits, totaling in excess of $33 billion in June 2000. [1]   Of these, more than 31.5 million were retired persons and their family members, but Social Security is also much more than just a retirement program.  More than seven million family members of deceased workers and approximately 6.6 million disabled workers and their dependents received monthly Social Security benefits.  The Social Security program is, in fact, an intergenerational compact that has become America’s family protection plan.

Because of these programs, people in this country are doing much better economically.

SSA is also responsible for the management of the Supplemental Security Income (SSI) program.  SSI, based in Title XVI of the Social Security Act, is a means-tested program that pays monthly checks to people who have limited assets and income, and who are 65 or older, blind, or disabled. 

The original Social Security Act established a Social Security Board (Board) as an independent agency, comprised of three members appointed by the President.  The Chief Executive was the Chairman of the Board, who reported directly to the President.  The Board was abolished in 1946 and replaced by the Social Security Administration.  Since 1946, a single Commissioner has headed SSA.  Thirteen persons held the position of Commissioner between 1946 and 2000.

As the Chief Executive Officer, the Commissioner represents SSA, both internally and externally, as its leader.  In this role, the Commissioner must be able to communicate effectively to the Congress and to the public. The Commissioner must lead with high energy and boundless enthusiasm, give employees a sense of purpose and direction, and plan for success.