Social Security has existed for nearly a century.
In 1935, then-President Franklin D. Roosevelt signed the Social Security Act, creating a government program designed to provide financial assistance to the nation’s retired workers.
President Roosevelt said in signing the bill: “We can never insure 100 percent of the population against 100 percent of the risks and ups and downs of life, but we can guarantee that the average “We have tried to frame laws that give a certain degree of protection to people who are suffering from unemployment and poverty in their old age.” ”
Social Security has evolved over time and is now touted by the government as “one of the most successful anti-poverty programs” in U.S. history. The Social Security Administration estimates that an average of about 68 million Americans will receive benefits each month in 2024. These beneficiaries are not just retired workers.
So who is eligible for Social Security at what age? And how much are the payments? Here’s what you need to know about Social Security.
What is Social Security?
Social Security provides financial benefits to retired workers, eligible people with disabilities, survivors of deceased workers, and dependents of beneficiaries.
According to the Social Security Administration, retired workers and their dependents accounted for 77.8% of the total benefits paid in 2023. Workers with disabilities and their dependents accounted for 11% of the total benefits paid, and survivors of deceased workers accounted for 11.2%.
What is Social Security Tax?
This program is funded by American workers through payroll taxes. Employers and employees each pay 6.2% of their income (up to a tax cap of $168,600 in 2024) in Social Security taxes. Self-employed people pay 12.4% tax.
The Social Security Administration has announced that approximately 85 cents of every Social Security tax paid is donated to the Old Age and Survivors Insurance (OASI) Trust Fund, which benefits current retired workers and their families, as well as surviving spouses of deceased workers and He says it will benefit children. Approximately 15 cents will be donated to the Disability Insurance (DI) Trust Fund, which is dedicated to people with disabilities and their families.
The trust fund is also used to pay the costs of the Social Security Administration administering its programs. The agency says these costs represent less than 1 cent of Social Security taxes paid.
How is Social Security calculated?
Social Security is the main source of income for most people over age 65, but it’s not the only source. The amount of Social Security benefits a retired worker receives depends on their income and when they start receiving benefits.
According to the Social Security Administration, for those who begin receiving benefits at full retirement age in 2023, these benefits will be 78% of preretirement income for low-income earners, about 42% for middle-income earners, and about It can reach 28%. management. This proportion was higher for those who started receiving benefits after reaching full retirement age, and lower for those who started receiving benefits before reaching full retirement age.
How much does Social Security pay?
The average monthly Social Security payment for all beneficiaries in September 2024 was $1,784.44. The average retirement benefit was $1,837.79.
The Social Security Administration announced in October that it would introduce a 2.5% cost-of-living adjustment (COLA) to benefits starting next year. This increase would mean an average increase of about $50 in monthly retirement benefits.
Each year, the Social Security Administration issues cost-of-living adjustments (COLA) for Social Security and Supplemental Security Income (SSI) benefits. Here’s what it is and how it’s calculated.
From what age can I receive social security?
Workers can qualify for Social Security retirement benefits at age 62, but full benefits are not received until they reach retirement age. The full retirement age depends on a person’s year of birth. The full retirement age for people born after 1960 is 67 years.
Check out the full breakdown below.
Birth Year Full Retirement Age 1943-195466 195566 + 2 months 195666 + 4 months 195766 + 6 months 195866 + 8 months 195966 + 10 months 1960 and later 67 Information via Social Security Administration
Is social security insufficient?
If Congress does not act to keep Social Security solvent, the trust fund could be depleted in about a decade. That’s because Social Security pays out more money than it brings in. The two trust funds have a combined deficit of $41.4 billion in 2023.
Currently, the estimated depletion date for trust funds used for retirement benefits is 2033. The combined estimated depletion date for the trust funds used for retirement and disability benefits is 2035.
But even if these trust funds aren’t replenished, that doesn’t mean the end of Social Security. The Social Security Administration expects to provide 79% of retirement benefits after 2033 and 83% of the total from 2035 onwards.
