Social security benefits are some of the most widely used benefits across the United States. With Social Security standing as a major government program for many US residents, the experience for US citizens on Social Security is regularly monitored to ensure the people of the United States are receiving the important benefits that they need to maintain a good standard of life. Here are some of the top five facts about Social Security you may not know:
- It has two types of benefits: Social Security is two-pronged including an old-age and survivors insurance program as well as a disability insurance program. Each type of Social Security has separate finances which are managed through to various trust funds. While the programs do work in combination to each other they are managed completely differently.
- Disabled benefits are available for many citizens: the supplemental security income program can provide solutions for blind, aged and disabled people even if they haven’t had any prior workplace experience. This fee is administered directly to the Social Security Administration and it is not funded directly through taxes and Social Security.
- A large number of people are using social security benefits: in statistics taken from 2013 around 18% of US citizens were receiving some type of monthly Social Security benefits. This totals in the number of 57.5 million people.
- Payroll taxes constitute most of the funding: around 96% of the income for the Social Security program is generated through gross wages from United States workers. Payroll taxes are levied from workers across almost any type of industry in the United States. These taxes will often appear on payroll as FICA or SECA and these stand for self-employment contributions act and Federal insurance contributions act.
- Qualifying for old-age benefits: to qualify for old age benefits generally a person needs to work for at least a decade earning at least $4800 in a year. With this type of earning potential and contribution you can receive the minimum amount of old age security benefits through Social security. People that have lower incomes are out there working career will often receive higher ratios of annual Social Security benefits to taxes. As you earn more and contribute more you will receive a higher annual benefit but also typically receive a lower percentage of your lifetime payroll taxes. An example of this could be someone that earns 15,000 a year receiving a benefit of 13% as an annual benefit or around $10,752. A person earning $115,000 per year working the same amount of time could receive 5% of their lifetime payroll taxes or a benefit of around $33,720.
As you can see from some of these facts it’s important to not only save but to work at understanding Social Security benefits so that you can enjoy a comfortable retirement.