Social Security is a federal program in the United States that provides financial benefits primarily to retired workers, disabled individuals, and survivors of deceased workers, as well as their families. It is administered by the Social Security Administration (SSA) and was established by the Social Security Act of 1935 during President Franklin D. Roosevelt's administration
Key Aspects of Social Security:
- Purpose: Social Security replaces a portion of a worker's pre-retirement income based on their lifetime earnings. It is designed to provide income security in old age, disability, or upon the death of a family breadwinner
- Types of Benefits:
- Retirement benefits for workers aged 62 or older who have paid into the system for at least 10 years.
- Disability benefits for workers who cannot work due to qualifying disabilities.
- Survivor benefits for spouses, children, and dependent parents of deceased workers.
- Benefits for spouses and ex-spouses under certain conditions
- Funding: The program is funded through payroll taxes collected under the Federal Insurance Contributions Act (FICA). Workers and employers contribute to Social Security taxes, which are used to pay current beneficiaries. Excess funds are held in trust funds for future use
- Coverage: Almost every American worker participates in Social Security, with about 184 million people contributing in 2024 and approximately 68 million receiving benefits as of September 2024
- Not Sole Income Source: Social Security is intended to supplement other retirement income sources such as personal savings, employer-sponsored retirement plans, and investments. The benefits replace a percentage of pre-retirement income, varying by earnings and age at benefit claim
- International Perspective: More broadly, social security refers to societal protection systems that ensure access to healthcare and income security in cases like old age, unemployment, sickness, disability, maternity, or loss of a breadwinner. It is recognized as a basic human right but is not universally available worldwide
In summary, Social Security in the U.S. is a comprehensive social insurance program providing financial support to retirees, disabled individuals, and survivors, funded by payroll taxes and serving as a critical part of the social safety net
