Social Security

Social Security refers to a set of benefit programs established and run by the federal government. The Social Security program is commonly identified with old age or retirement benefits and with disability benefits. The program was created in 1935 as part of Franklin Roosevelt’s New Deal initiative. Medicare and Medicaid are also social insurance programs established and administered by the federal government, but they are separate from Social Security. Social Security is a “pay-as-you-go” entitlement program. This means that current tax revenue is used to support current beneficiaries. In other words, there are no assets set aside to fund future benefit payments. When combined with demographic trends (i.e. an aging society), the pay-as-you-go funding approach is a feature that brings into question the sustainability of Social Security. Currently, Social Security is funded largely through payroll or “FICA” taxes which are a blend of employee and employer contributions that come from taxes on the wages of workers and the self-employed. Whether you’re employed or are self-employed, Social Security taxes amount to 10.4% of earnings, with the applicable earnings capped by a ceiling that is adjusted every year. The earliest age to get retirement benefits is 62, but the longer you wait, the higher the benefits. The average Social Security benefit in January 2012 is $1,229 per month. Social Security benefits are inflation-adjusted with increases pegged to the consumer price index (CPI). Social Security is the sole source of retirement income for 22 percent of beneficiaries, and the program is the majority (greater than 50 percent) source of retirement income for 66 percent of beneficiaries.

Who is eligible for Social Security?

Eligibility for Social Security is first determined by the amount of payroll taxes which have been deducted during the individual’s lifetime. Under most circumstances, individuals become eligible to receive Social Security benefits when they reach the minimum stated retirement age. In some more rare circumstances, individuals become eligible for Social Security

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How can I get a copy of my Social Security card?

To get a copy of your Social Security card, you must complete an application (http://www.ssa.gov/online/ss-5.pdf) and provide proof of your identity. You can bring these documents to your local Social Security office or you can send them through the mail.

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What is the purpose of Social Security?

The purpose of Social Security is to provide financial assistance to individuals of old age during retirement, to disabled citizens and as a survivor’s benefit to individuals and their families.

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