Final answer:
Social Security benefits act as a type of social insurance, with workers contributing to receive future retirement and health care benefits. This program helps provide a financial safety net for the elderly, reducing poverty among retirees by supplementing their income.
Step-by-step explanation:
Social Security benefits can be thought of as a type of social insurance. While these benefits aren't "insurance" in the traditional sense, they function similarly. Workers pay a portion of their income into these programs, such as Social Security and Medicare, to receive income and health care benefits in the future. These contributions provide a safety net for when individuals retire or if they become ill when they are older.
Social Security is particularly targeted at providing financial support during old age, with the program drawing its origins from the Social Security Act of 1935. Retirement benefits begin typically at age 65, with the amount based on earnings during one's working years. It's essential to note that Social Security was not designed to fully replace pre-retirement income, but to substantially aid in reducing elderly poverty.