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What is Social Security?
The Social Security program was established 70 years ago to provide guaranteed monthly benefits to workers and their families upon retirement, disability or death. Only people who have worked at least 10 years are eligible for the Social Security benefits, which continue to be paid as long as the beneficiary depends on them. It is the only guaranteed insurance plan, unlike employer plans such as IRAs or 401K, that risk workers’ money on the ups and downs of the stock market
Social Security has been providing benefits to millions of workers, guaranteeing working and retired Americans and their families an income to keep them out of poverty. It was set up as a social insurance program to supplement workers’ savings for old age, or to have as a guaranteed safety net for workers and their families in case of disability or death. For 35 percent of the population that currently receive social security, that monthly check supplements about half of their total income. But for 33 percent of its beneficiaries, the Social Security check is their sole source of income. Without it, many more of our population’s elderly, disabled or orphaned families would be in poverty.
Social Security’s benefits are mainly paid by workers and their employers: a 6.2 percent social security tax taken out of a worker’s pay check, matched by a 6.2 percent tax paid by the worker’s employer. Benefits are also paid by interest collected on money borrowed from Social Security’s trust fund, which is where the surplus of funds is stored. Presently, Social Security collects more in taxes than it pays in benefits. The excess is borrowed by the U.S. Treasury, which in turn issues special-issue Treasury bonds to Social Security. These bonds totaled $1.5 trillion at the beginning of 2004, and Social Security receives more than $80 billion annually in interest on them.
What is Social Security?
Social Security has been providing benefits to millions of workers, guaranteeing working and retired Americans and their families an income to keep them out of poverty. It was set up as a social insurance program to supplement workers’ savings for old age, or to have as a guaranteed safety net for workers and their families in case of disability or death. For 35 percent of the population that currently receive social security, that monthly check supplements about half of their total income. But for 33 percent of its beneficiaries, the Social Security check is their sole source of income. Without it, many more of our population’s elderly, disabled or orphaned families would be in poverty.
Social Security’s benefits are mainly paid by workers and their employers: a 6.2 percent social security tax taken out of a worker’s pay check, matched by a 6.2 percent tax paid by the worker’s employer. Benefits are also paid by interest collected on money borrowed from Social Security’s trust fund, which is where the surplus of funds is stored. Presently, Social Security collects more in taxes than it pays in benefits. The excess is borrowed by the U.S. Treasury, which in turn issues special-issue Treasury bonds to Social Security. These bonds totaled $1.5 trillion at the beginning of 2004, and Social Security receives more than $80 billion annually in interest on them.
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