Final answer:
Social Security was indeed never meant to be the only source of income for retirees; it was intended as a supplemental income. Today, many rely on it heavily, with some using it as their only income. The program is under financial strain due to demographic changes.
Step-by-step explanation:
True, Social Security was never intended to be the sole source of income for people in retirement. Since its inception during the Great Depression, Social Security has evolved into a crucial component of retirement planning for many Americans.
The system was designed to provide a foundation of retirement income, which would then be supplemented by other sources such as personal savings, investments, and pensions.
Currently, Social Security benefits replace about 42% of an individual's pre-retirement wages. The program is particularly important for a significant portion of the elderly population with over 30 percent of the aged relying on these benefits as their only source of income.
Despite its intention as a supplemental income, many retirees find themselves depending heavily on Social Security to meet their basic needs, especially as other retirement savings may prove insufficient.
The program faces challenges due to demographic shifts and long-term financial sustainability concerns. With an increasing number of benefactors reaching retirement age and fewer workers contributing, adjustments to the system, such as increasing the retirement age or payroll tax, have been proposed to ensure its viability.