Social Security is a crucial source of financial security for millions of Americans. However, many people underestimate its true value.
While it’s easy to focus on the monthly payments, Social Security is a reliable, long-term source of income that helps cover essential expenses throughout retirement.
Social Security is a federally funded program supported by payroll taxes. It serves as a safety net for those who have contributed throughout their working years. Your benefit amount depends on:
Many believe Social Security will only cover a small portion of their income. While it may not cover all expenses, it plays a vital role in financial stability, especially as the cost of living increases.
One of the most valuable features of Social Security is the Cost of Living Adjustment (COLA). This annual increase ensures that benefits keep pace with inflation, maintaining retirees' purchasing power. Without COLA, the real value of Social Security benefits would decline over time.
| Year | COLA Increase |
| 2025 | 2.5% |
| 2024 | 3.2% |
| 2023 | 8.7% |
| 2022 | 5.9% |
| 2021 | 1.3% |
Source: Social Security Administration
Your Social Security benefit depends on your earnings history and the age at which you begin claiming benefits:
The maximum benefit is reserved for high earners who have contributed to the system over a long career. Even if you don’t qualify for the maximum, understanding potential benefits can help with retirement planning.
Social Security is likely not going anywhere. The program remains a key source of financial security for retirees, disabled individuals, and survivors.
While there are discussions on reform, the program will likely remain a key source of financial security for years to come as it receives broad bipartisan support and millions rely on it.
Although Social Security may not replace all your income in retirement, it remains a critical and dependable financial resource.
Key takeaways:
Need help deciding when to claim Social Security? Schedule a free consultation with one of our financial planners today!
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Jordan Bilodeau, CFP®, CEPA, is the Director of Planning & Strategy at Spaugh Dameron Tenny, where he leads firmwide planning initiatives and helps clients navigate complex financial decisions. With experience in portfolio design, tax strategies, and business succession planning, Jordan works with executives, physicians, dentists, and successful retirees to coordinate every aspect of their financial lives. He holds both the CERTIFIED FINANCIAL PLANNER® and Certified Exit Planning Advisor designations and has a Master’s degree in Wealth and Trust Management, providing tailored guidance for clients.
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