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Many retired people today depend on Social Security benefits as their main source of income, and as their primary source of health care. The Social Security Administration is the agency in charge of the system and its headquarters are located in Woodlawn, Maryland.

Social Security Programs

The main programs run by the Social Security Administration are:

• Social insurance for retired people, widows, children of deceased, disabled, or retired parents, and disabled people.
• Supplemental Security Income (SSI) to provide support for the aged and disabled who do not have sufficient income from other sources.
• Medicare health insurance for aged and disabled people.
• Temporary Assistance for Needy Families

Several trust funds are mandated to pay for Social Security benefits, but some programs have alternate sources of funding. For example, Supplemental Security Income is paid from US Treasury general funds.

How the system works

Workers and recipients of benefits are issued a Social Security Card together with a Social Security number. When someone is hired, the employer uses the Social Security number to pay taxes for the employee based on the latter’s earnings.

When a person becomes eligible for benefits they should apply at their local Social Security office. The application is reviewed by the Social Security Administration, and if approved, the insurance payments or other Social Security benefits begin.

There have been cases of fraud involving Social Security cards or Social Security numbers. The Social Security Administration has worked to address fraud and identiy theft with more advanced security systems.

12 Reasons for Social Security

While Social Security was controversial during the original debate that gave rise to the system, almost everyone supports the insurance programs now. Here are 12 reasons why Social Security is needed.

1. Safety net -- The system provides a safety net for those who are no longer able of supporting themselves through normal means.
2. Protects the economy – By providing income to people who would have difficulty earning income otherwise, the benefits help people to remain in the consumer market.
3. Helps prevent destitution and homelessness – By providing benefits to the disabled, unemployed, survivors and others, the system helps to keep people off the street where they can become a danger to themselves and others.
4. Provides social stability – When people are unable to take care of their basic needs like food and shelter they can become desperate and are easily recruited into radical action.
5. Helps the poor – They say that you can judge the civilization of a country by the way they treat their poor.
6. Protects the youth – By providing for orphans, and children of retired and disabled parents, Social Security helps safeguard the welfare and future of children.
7. Provides peace of mind – By knowing that they have something available at the local Social Security office there to protect them, people have greater peace of mind contributing to better mental and physical health.
8. A major source of health care – The health insurance system in America has become increasingly inadequate in providing for the heath care needs of Americans. Some 40-50 million Americans have no health insurance at all, and many millions more have inadequate health insurance coverage. The number of underinsured people is also growing very rapidly. Medicare has become a very important source of health care for Americans who are aged, survivors or disabled.
9. Protects families – Social Security provides programs that help keep needy or otherwise distressed families together, and helps provide for their needs.
10. Helps states with health programs – The Medicaid program gives grants to states for their own medical assistance programs. This helps address discrepancies in health costs from state to state.
11. Helps unemployed workers get back on their feet – The system provides benefits for workers that have become unemployed.
12. Protects public health – By providing health care to those who otherwise would have no access to such services, Social Security helps protect the overall public health by controlling the spread of infectious diseases.

Questions about Social Security’s financial stability

Social Security taxes are deposited in several trust funds designed to pay for the benefits programs. However, funding for the agency has become problematic. A large portion of the Social Security Administration’s obligations are unfunded. Some critics have claimed that the whole system is nothing but a “Ponzi scheme” in which the benefits of current recipients are paid for by those contributing currently into the Social Security Trust Fund. In 2008, the total unfunded obligation was calculated at about $13.6 trillion.

As large numbers of baby-boomers begin collecting benefits, many fear that the Social Security system could go bankrupt. Another problem is that revenues paid into the system that exceed costs are generally used to finance the federal government’s deficit. The unfunded obligation of Social Security is the difference between the current obligations or “debts” of Social Security and the present value of the Trust Fund combined with the projected tax revenues. Many note that the value of the Trust Fund is reliant on the federal government’s ability to make good on a growing national debt.

In order to address these problems, various solutions have been offered. Some conservative officials have recommended privatizing the system. Another plan is to cut Social Security costs especially those linked with Medicare and Medicaid. Health-related costs are the largest burden on the present system, and health care reform is seen as a necessary step to bring down medical costs.

Estimating SS benefits online

The Social Security Administration website offers free calculators that allow users to estimate future benefits over the internet. The calculators are found at: Options include a retirement estimator, a quick online calculator and a detailed calculator.