Social Security offers a guaranteed and progressive benefit that’s always upgraded with increases in the cost of living

Social Security benefits are calculated based on the earnings of American citizens. With these earnings, people pay Social Security payroll taxes, and that’s how the benefits are calculated. It goes like this: the higher their earnings, the higher the benefits.

It’s worth mentioning that Social Security benefits are progressive, as they represent a higher proportion of how much a worker earns, but they apply to lower earning levels. For instance, benefits for a low-earner who decides to retire at 65 years old this year provide no less than $14,824 a year, which replaces half of their prior earnings.

However, benefits for a high earner (with 160 percent of the average wage) might provide $32,345, which replaces 30% of prior earnings, even if they are larger in dollar terms than those for the low-wage worker.