Question

Which of the following statements are correct regarding Social Security's role in the financial security of retirees?

I. Widows are particularly dependent on Social Security.
II. Social Security is the primary source of retirement income for the majority of retirees today.
III. Social Security is one of many sources of retirement income that protects against inflation risk, market risk, and longevity risk for the average American retiree.
IV. The role of Social Security in the lives of retirees is smaller than it has been in the past and is expected to continue to decrease.

A) I and II
B) II and III
C) III and IV
D) I and IV

Answer 1

Social Security provides income for widows and protects against inflation, market, and longevity risks. It remains an important source of income for retirees.

Step-by-step explanation:

I. Widows are particularly dependent on Social Security.

II. Social Security is the primary source of retirement income for the majority of retirees today.

III. Social Security is one of many sources of retirement income that protects against inflation risk, market risk, and longevity risk for the average American retiree.

IV. The role of Social Security in the lives of retirees is smaller than it has been in the past and is expected to continue to decrease.

The correct statements are: I and III. Widows are particularly dependent on Social Security as it provides a source of income after the death of a spouse. Social Security is one of many sources of retirement income that protect against inflation risk, market risk, and longevity risk for the average American retiree. However, statement II is incorrect as Social Security is not the primary source of retirement income for the majority of retirees today. Statement IV is also incorrect as the role of Social Security in the lives of retirees has not decreased, but rather remains an important source of income.