Should I Count on Social Security Being Around When I Retire?

By Mary Beth Storjohann via

Members of younger generations, from Gen X to Gen Z, are worried about retirement, and with good reason! Right now, only 60% of workers are actively contributing to their workplace retirement savings account. While today’s rising economy has freed up the cash flow for many employees to start contributing more than they have in the past, that doesn’t mean everyone is on track to have enough saved by the time that they retire.

When I talk to people about their retirement savings strategy, the question of Social Security is almost always raised. Nobody is exactly sure how the program works, how much they can expect to receive when they retire, and whether or not they’re going to be able to count on it at all. The good news is that Social Security likely will play a role in everyone’s retirement income. How big of a role, on the other hand, is somewhat up in the air.

How Does Social Security Work?

Social Security was established in 1935 by the Social Security Act. Essentially, the program is designed to help America’s senior citizens and retirees stay financially stable after they leave their full-time jobs. When we’re employed, we pay into Social Security through the taxes that come out of our income each paycheck. A total of 12.4% of your income is contributed to the program – 6.2% is contributed by you (removed from your paychecks), and 6.2% is contributed by your employer, (so for my self-employed readers, you’re paying both sides of this).

Right now, the Social Security administration reports that $0.85 cents of each dollar that’s contributed to Social Security is directly contributed to a trust fund that pays out benefits to retirees and other Social Security program participants. That money adds up over time, and is used to calculate what your annual or monthly payout will be once you retire. Essentially, the longer you’re able to stay in the workforce to contribute toward Social Security, and the longer you delay taking Social Security during retirement, the higher your payout will be.

Many people plan on Social Security for at least a portion of their retirement income. Currently, the average Social Security payout is just over $1,400/month for people who enrolled in 2017.

Click here to read the full story on