Many people are unsure how Social Security functions, whether it will be available for future retirees, and what they can do to maximize their benefits.

From your first job, you likely noticed that your paycheck is less than your actual earnings. Deductions for federal and state taxes, plus Medicare, significantly reduce your take-home pay, and a substantial portion goes toward Social Security.

While you might have a vague understanding of how Social Security could assist you in retirement, many remain confused about its workings, its longevity, and how to optimize their benefits. Let's clarify.

What is Social Security?

Founded in 1935, Social Security was introduced to help the U.S. recover from the Great Depression. It serves as a safety net, providing support for the elderly, disabled, and veterans in managing living costs.

Every U.S. worker contributes to Social Security via payroll taxes. You contribute 6.2 percent of your income up to $128,700 (as of 2018), which your employer matches. If you're self-employed, you cover the entire 12.4 percent yourself.

Currently, Social Security benefits over 63 million Americans, primarily serving around 42.5 million retirees.

Anyone aged 62 or older who has worked for at least 10 years can claim Social Security retirement benefits. These years don't need to be consecutive, allowing for seasonal or varied employment.

Maximizing Social Security Benefits

You can start receiving Social Security retirement benefits at age 62, but this is considered early retirement, and your benefits will be lower. For instance, if you begin at this age, you could face up to a 30 percent reduction in your payouts.

Conversely, delaying benefits until age 70 can boost your monthly payments by 32 percent compared to starting at 66.

It's a complex decision. Some experts suggest delaying benefits for maximum payouts, while others highlight the advantages of receiving smaller amounts earlier. If you take benefits at 62, you'll receive a lower amount but may enjoy payouts for a longer period.

Remember, Social Security isn't designed to fully replace your income. The benefits you receive depend on your lifetime earnings and when you start collecting. Currently, the average benefit for retirees is about $1,400 monthly.

Clearly, counting solely on Social Security won't fulfill your retirement dreams. It's essential to save and invest in other retirement accounts. Think of Social Security as a bonus, not the main course. You can calculate more accurate benefits using this calculator.

Is Social Security Sustainable for Future Retirees?

Here's the reality: Social Security operates on a pay-as-you-go basis, meaning that the contributions you're making now fund current beneficiaries instead of being saved for you. The program is expected to start using reserves in 2018 for the first time since 1982 and may deplete its $3 trillion trust fund by 2034.

This doesn't imply that future generations will receive nothing, but it does suggest that Social Security may not be fully funded. Millennials might only receive around 75 percent of their benefits upon reaching retirement age unless adjustments are made to the payroll tax, earnings ceiling, or benefits formula.

Ultimately, the wisest strategy is not to rely solely on Social Security. Begin investing in more secure retirement and savings options now.