Social Security provides social insurance by redistributing income from high earners to low earners

Lifetime Benefit-to-Tax Ratio of the 1960s Birth Cohort by Income Groups

Source: Congressional Budget OfficeGet the dataEmbed Download image
Notes: A lifetime benefit-to-tax ratio of 1.0 means that the expected payment of lifetime benefits equals the expected cost of lifetime taxes. The benefit-to-tax ratio is measured as the expected present value of lifetime benefits divided by the present value of lifetime payroll taxes. Present values convert a stream of benefits or tax payments into an equivalent lump-sum amount received or paid today. Benefit-to-tax ratios are based on scheduled benefits, which are calculated under the Social Security Act, regardless of the balances in the trust funds. A quintile is 20% of the income distribution.