GIB#1  

Introduction 

The U.S. retirement income system has two main components — Social Security and publicly subsidized and regulated employer plans. The federal government created Social Security in the Great Depression, when the problem of old-age poverty was especially severe. Social Security is an employment-based social insurance program that assures older workers a basic replacement income they can no longer work. Contributions are proportional to earnings up to a maximum level; benefits are based on a worker’s earnings and contribution history, with a significant redistributive twist to assure a basic old-age income to low-wage workers...

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Steven A. Sass is a research associate at the Center for Retirement Research at Boston College and author of The Promise of Private Pensions (Harvard University Press 1997) and co-author of “Social Security: How Social and Secure Should It Be?” in Steven Sass and Robert Triest, eds., Social Security Reform: Links to Saving, Investment, and Growth (Federal Reserve Bank of Boston 1997). He thanks Robert Ball, Steve Goss, Alicia Munnell, Andrew Eschtruth, Amy Chasse, and Kevin Meme for their contributions to this piece. The Center gratefully acknowledges the Alfred P. Sloan Foundation for providing support for this new publication series.