When addressing social security issues with clients, particularly those under forty, I am often told, “There will never be anything there for me.” This statement has always bothered me because it illustrates a basic lack of understanding by the American consumer (and often their financial adviser) about the benefits provided by the Social Security System.

Let’s start with an overview. During 2023 if Average Joe earned $6,560 or more, he received the maximum four credits in the Social Security system for the year 2023. This cost him $501.84 if he was a W-2 employee (his employer matched his share) or $1,003.68 if he was self-employed. If Joe repeats this for nine more years during his life, he has earned complete, minimum coverage under the system. In other words, for a minimum of $5,020 (ten years at $502 per year) Average Joe has received total retirement and medical coverage under the Social Security system.

But what does Joe really get for this $5,020? Our system provides the following benefits to this average Joe for his ten years (forty quarters) of minimum entry-level coverage:

A retirement income for Joe starting as early as age sixty-two.

A retirement income for Joe's wife, as early as age sixty-two, even if she has never had earned income (age 60 if Joe is dead).

A full Medical system at age sixty-five (Medicare) for the remainder of his life.

A full Medical system for his wife at age sixty-five, even if she has never had earned income.

Disability benefits for Joe in the event of injury today.

Disability benefits as early as age fifty for Joe's widow even if she was never covered.

Dependent benefits for his disabled, minor, or dependent children, even after Joe’s death.

Dependent benefits for his dependent parents.

Dependent benefit for Joe's wife to care for any children at home underage dependent in the event of Joe's death, disability, or drawing of his retirement benefit (called child-in-care benefit).

Death benefit for Joe’s widow.

Joe gets all of this for $5,020. Yes—possibly the greatest financial investment available to every American, the Social Security system has been misunderstood, maligned, and ignored by nearly everyone. Clearly the system is not meant to be just a retirement plan, it is more precisely a safety net for all Americans, providing rudimentary retirement, disability, and medical coverage at all ages to nearly all Americans. Benefits are not based on need but rather on your payments into the system. The benefits are skewed to provide greater benefits as a percentage of taxed income to lower income earners than to higher income earners.