Social Security Franklin D. Roosevelt signed the Social Security Act into law in 1935. The intent of this Act was to provide protection to average citizens and their families from falling into poverty during their old age. When there is talk about cutting the federal budget, the subject of cutting Social Security benefits is often brought up. This is because of concerns over the program’s long-term viability. Since 2010, Social Security has paid out more money than it has coming in. In fact, 45 percent of the government’s payouts can be attributed to Social Security, Medicare and Medicaid payments.

A recent Pew Research Center survey showed that 50 percent of young Americans believe that there will be no Social Security by the time they retire. Despite a gloomy outlook, the majority of Americans do not believe these benefits should be reduced.

What is an Entitlement?

Today, there is a common misconception on how the Social Security is categorized because it often referred to as an entitlement program, which is somewhat of a misnomer. The term entitlement can have different connotations. When one is said to be “entitled,” it may mean that they have a right to specified benefits through a law or contract. It may also refer to government programs that provide benefits to members of a specific group through funds that support and are distributed by that program. But the definition of entitlement that makes people question the Social Security program is the belief that someone deserves or is entitled to certain benefits or privileges.

The last definition is the one that comes to mind when someone refers to Social Security as an entitlement program, but it is incorrect. The Social Security system is funded by workers who contribute to the fund through deductions from their paychecks known as the FICA tax. Employers are required to pay their share of the Social Security tax for their employees also. So when worker retires, they are entitled to receive payments from the system that they have paid into for decades. If they are denied their benefits, they make seek the assistance of Social Security attorneys in Chicago to receive the benefits in which they are entitled.

An Inter-Generational Transfer of Wealth

Social Security has always been based on the concept of a pay-as-you-go program. Today’s retirees receive benefits that are funded through taxes that are paid by today’s workers. Social Security taxes were raised in 1983 in anticipation for an expected onslaught of retirees from the Baby Boomer generation. Without additional intervention, it is possible that Social Security’s reserves will be depleted by 2034.