Social Security: you’ve been paying taxes for it since you got your first paycheck and you noticed that you weren’t getting all the money you spent hours earning. So what is it and how does it work? Let these Social Security facts help you get more familiarized with the system.
It’s not that complicated: Social Security is a government system that provides money for people who retire, are unemployed, or become disabled. That means that every single citizen of America will at one point benefit from Social Security, even if it doesn’t feel like there’s any “immediate” use for it when you’re young and able-bodied.
Social Security was first established by President Franklin D. Roosevelt in 1935 when he created the Social Security Board. The purpose of Social Security was to ensure people during the Great Depression suffering from poverty and unemployment would be aided by the government.
The majority of the Social Security program is dedicated to retirement benefits, given out to workers after they work a certain number of years, have paid a certain amount of taxes to the government. In 2008, the Social Security Administration paid some 50 million Americans over $615 billion worth of retirement benefits.
In 2012, Social Security benefits took up 22% of the federal budget, by far the biggest expense. (To compare, 19% went to defense and international security assistance and 21% was spent on Medicare and Medicaid.) In December of 2012 alone, 36.7 million retirees were paid on average of $1,262 in retirement benefits.
According to the government’s Social Security fact sheet, these benefits make up 39% of the elderly’s yearly income.
For the purposes of this guide, we’ll focus on Social Security benefits for future retirees: how to qualify, what you need to begin the application process, and how to apply.
Read on for more.