As headlines revolve around the impact of the coronavirus and the costs of government spending packages to keep the economy afloat, the state of Social Security is one thing we can find at least some assurance in, says Gail Buckner, our personal retirement and financial planning strategist. She takes a look at the latest Social Security Trustees’ Report, released on April 22.

If you’re like most other Americans, you have a retirement plan that is not affected by what happens on Wall Street/in the financial markets.

It’s called “Social Security.”

Social Security was one of several federal programs created in response to the Great Depression, which started in 1929 and lasted a decade. By 1933 the nation’s unemployment rate had hit 25%. One out of four working Americans had lost their job. There were literally Americans dying on the streets of our cities because they could not afford food or a place to sleep. Many of them were our most vulnerable citizens—the elderly.

That year, under newly elected President Franklin Roosevelt, Congress passed the first “New Deal,” a package of short-term economic programs which, among other things, included work assistance programs and financial aid. It also put an end to the gold standard and introduced prohibition. Two years later, a second wave of New Deal legislation was signed into law creating the Securities and Exchange Commission (SEC), the Federal Housing Administration (FHA), the Social Security Administration and other programs. Despite this, in 1937 the economy collapsed into recession.

It was not federal programs or federal aid, but war that brought the United States out of the dark days of the 1930s. When President Roosevelt decided America would help Western Europe fight back Hitler’s Germany, millions of able-bodied men were suddenly employed—by the US military. By 1943, America’s unemployment rate was down to 2%.

What Is Social Security?

If you strip away the misconceptions and the drama that often surround the program, Social Security is an annuity—an account that is guaranteed to pay you a certain amount of money each month. You can buy an annuity from an insurance company, but it would not even approximate the benefits that Social Security offers. Although it began as a retirement income program, over the years Congress has greatly expanded the benefits that Social Security provides.

For instance, if a worker becomes disabled and is unable to work, she/he can receive a benefit at any age. So can family members such as spouses, minor children and dependent parents. When you die, close family members who survive you—such as your spouse and children—receive a benefit. Importantly, unlike the pensions so many people remember from the “good ol’ days,” you don’t lose your Social Security if you change jobs; your account is tied to your work history, not a particular employer.

In December of 2019, Social Security paid out more than $88 million (monthly rate) to over 64 million people. Here’s a breakdown: