What is a defining feature of Social Security?

A defining feature of Social Security is that it guarantees retirement income through a payroll tax. This program is designed to provide a safety net for individuals in their retirement years by automatically enrolling workers who pay into the system through payroll taxes during their working lives. This mandatory contribution ensures that a portion of workers' earnings is set aside to provide benefits for them and their families when they retire or in the event of disability or death.

The framework of Social Security is based on a pay-as-you-go system, where current workers' contributions fund the benefits of current retirees. This system helps ensure a stable source of income for retirees and serves as a key part of the broader social safety net in the United States.

In contrast to the misconception that it is optional, Social Security participation is mandatory for most workers, and it is designed for all eligible individuals, not just government employees or those interested in stock market investments. Understanding the function of payroll taxes and the assurance of retirement benefits is crucial for grasping the significance of Social Security in the American economic landscape.