Social Security: Beyond Comprehending

A virtue of a defined benefit is that it is defined--you understand what it is. The Social Security benefit formula is a lot more complicated than the benefit formula for a traditional private sector benefit. It is just beyond the comprehension of the typical person. So if you wake up on the first day of retirement and your benefit is 25% lower than you thought it would be, that's the same as waking up and learning your 401(k) dropped 25%. It's a big thing.