According to the Social Security Administration, more than 3 out of 5 retired workers lean on America's most important social program to provide at least half of their monthly income. What's more, 34% rely on Social Security for practically all of their income (90% to 100%). Suffice it to say, Social Security's guaranteed monthly payout has played a critical role for decades in keeping elderly poverty rates low.

However, this isn't to say that Social Security recipients aren't facing challenges.

Social Security benefits take a hit

To begin with, the entire program is facing a potential cash crunch within the next 16 years. Despite generating more revenue than the payments the Social Security Administration has made to beneficiaries since 1983, an estimated $3 trillion in excess cash could be completely exhausted between 2022 and 2034. Should this happen, and lawmakers on Capitol Hill fail to raise additional revenue, across-the-board benefit cuts of up to 23% may be necessary to extend payouts through the year 2091. This would be a major concern for those aforementioned retirees who lean heavily on their guaranteed benefit.

But an even more immediate concern for seniors is their ongoing loss of purchasing power via the annual cost-of-living adjustment, or COLA. In theory, Social Security's COLA is supposed to accurately represent the inflation -- i.e., the rising price of goods and services -- that recipients face each year. Unfortunately, the tethered inflationary measure for the program doesn't do a very good job of that.

The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), as the name suggests, keeps tabs on the spending habits of urban and clerical workers, who happen to spend their money very differently than seniors. And seniors comprise nearly 70% of the program's beneficiaries. Without getting adequate representation of their medical and housing costs, which for seniors tend to be much higher than for working-age Americans, COLA tends to be underrepresented for seniors. Since 2000, the purchasing power of a Social Security dollar has fallen by 30%, according to an analysis from The Senior Citizens League.