May 13, 2026
Sometimes things are good in theory, but not so much in practice.
If you've ever questioned whether Social Security is actually worth it, there's a few things that you might consider.
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Imagine Jennifer, whose father, Mason, says that he would have been better off if instead of having to pay into Social Security, he was able to invest that money himself.
Mason took the figures for his lifetime earnings and contributions, using the earnings history available on his my Social Security account, and then calculated what he would have earned if that money had instead been invested in the S&P 500.
He found that the total would be in the millions, and that the monthly drawdown amount he could take would be many times what he receives each month in Social Security benefits (1).
If you know someone who thinks the same, while you might not be able to convince them otherwise, here are a few points you could ask them to consider.
Social safety net
Social Security began in 1935, amid the Great Depression, which was the worst economic crisis in modern U.S. history, with millions of people unemployed (2).
The political response to the dire situation was the creation of Social Security. When he signed the Social Security Act, President Franklin D. Roosevelt said, "We can never insure 100% of the population against 100% of the hazards and vicissitudes of life, but we have tried to frame a law which will give some measure of protection to the average citizen and to his family against the loss of a job and against poverty-ridden old age."
Today, Social Security keeps millions of older Americans above the poverty line. According to the Center on Budget and Policy Priorities (CBPP), without Social Security, almost 4 in 10 older adults would be living below the poverty line (3).
According to the CBPP, one-fifth of Social Security beneficiaries receive disability or young survivor benefits (4). The CBPP also notes that "The risk of disability or premature death is greater than many people realize. Some 8% of recent entrants to the labor force will die before reaching the full retirement age, and many more will become disabled."
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How much you pay
There is a limit to how much of your earnings is subject to Old-Age, Survivors, and Disability Insurance (OASDI) tax. Workers and their employers pay into Social Security, as a percentage of earnings.
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In 2026, employers and workers each pay 6.2%. Self-employed people must pay 12.4%. The taxable maximum amount for earnings in 2026 is $184,500. So, if you made $184,500 or more, you would contribute $11,439, and so would your employer (5).
While the hypothetical situation of Jennifer's father Mason — where, instead of paying into Social Security, workers instead invest their own money into index funds — might make sense on paper, there is no guarantee that most Americans would do so.
When it comes to retirement savings, a recent Gallup poll found that only about six out of 10 Americans have money invested in a retirement savings plan such as a 401(k), 403(b) or individual retirement account (IRA) (6).
It's also easier for workers with higher incomes to save, whereas lower-income workers spend a bigger percentage of their earnings on necessities (7). For example, USDA research found that in 2024, the 20% of households with the lowest incomes spent an average of 33% of their before-tax income on food, while those in the top 20% spent 6.4% (8).
Bank of America data found that in 2025, almost a third of lower-income households, 29%, were living paycheck to paycheck — that is, spending 95% of income on necessities including housing, gasoline, groceries and utility bills (9).
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The Gallup poll found that 83% of Americans with household incomes of $100,000 or more had a retirement savings plan, while for those earning less than $50,000, that number drops to 28%. The poll also found "a sizable gap by race/ethnicity, with 68% of non-Hispanic white adults having a retirement savings plan versus 42% of people of color."
The risk factor
The way that your Social Security contributions are invested is very different than money that's invested in the stock market.
Your contributions are held in the Social Security trust funds, which are financial accounts in the U.S. Treasury. Money not used to pay benefits and administrative costs is invested in "special Treasury bonds that are guaranteed by the U.S. Government," according to the Social Security Administration (10).
Money you invest in the stock market, however, is subject to a lot more risk. That's why investors are typically advised to rebalance their portfolios as they near retirement, so they hold lower-risk investments.
If your retirement arrived amid a market downturn, such as the 2008 financial crisis, you could see your nest egg shrink. In the first quarter of 2009, Americans' retirement accounts had lost an estimated $2.7 trillion from their peak in 2007, according to the Urban Institute (11).
And remember that your Social Security contributions don't just come back to you as benefits when you retire — they also support survivors and dependents of deceased workers, as well as people with long-term disabilities.
Without the safety net of Social Security, millions of Americans could find themselves in dire financial circumstances, like those seen in the Great Depression, which inspired the program's creation in the first place.
Article Sources
We rely only on vetted sources and credible third-party reporting. For details, see our ethics and guidelines.
MarketWatch (1); Social Security Administration (2),(5),(10); Center on Budget and Policy Priorities (3),(4); Gallup (6); TD Economics (7); U.S. Department of Agriculture (8); CBS News (9); Urban Institute (11)
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Rebecca Payne has more than a decade of experience editing and producing both local and national daily newspapers. She's worked on the Toronto Star, the Globe and Mail, Metro, Canada's National Observer, the Virginian-Pilot and Daily Press.
