Taxes

We’re Working Together to Secure Today and Tomorrow

February 27, 2017 • By

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Last Updated: February 27, 2017

man and woman at tableYour first job is a landmark occasion. You’re meeting new people, making professional connections, and probably cashing that first paycheck. You might be a little surprised when you see a portion of your earnings go to a tax called “FICA” for the Federal Insurance Contributions Act. This deduction goes to Social Security and is your way of helping us secure your today and tomorrow. It’s our job to keep the safety net of Social Security strong through your incremental contributions.

Understanding how important your contribution is takes some of the sting away because your taxes are helping millions of Americans. By law, employers must withhold Social Security taxes from workers’ paychecks. While referred to as “Social Security taxes” on an employee’s pay statement, sometimes the deduction is labeled as “FICA.” This stands for Federal Insurance Contributions Act, a reference to the original Social Security Act. Sometimes, you will see “OASDI,” which stands for Old Age, Survivors, and Disability Insurance, the official name for the Social Security Insurance program.

The taxes you pay now mean a lifetime of protection — for retirement in old age or in the event of disability. And when you die, your family (or future family) may be able to receive survivors benefits based on your work.

You probably have family members — grandparents, for example — who already enjoy benefits that your Social Security taxes help provide. Social Security is completely solvent through 2033. At that point, retirement benefits will be reduced to 75 percent, unless changes are made to the law. In the past, Social Security has evolved to meet the needs of a changing population — and you can count on Social security in the future.

Because you’re a long way from retirement, you may have a tough time seeing the value of benefit payments that could be many decades in the future. But keep in mind the Social Security taxes you’re paying can provide valuable disability or survivors benefits, if the unexpected happens. Studies show that of today’s 20-year-olds, about one in four will become disabled, and about one in eight will die before reaching retirement.

To learn more about Social Security and exactly what you’re earning for yourself by paying Social Security taxes, take a look at our online booklet, How You Earn Credits, at www.socialsecurity.gov/pubs/10072.html.

We’re doing this job together. The small amount you contribute with every paycheck allows us to help millions of retired workers, disabled people, and veterans. You can learn more about how we’re with you through life’s journey at www.socialsecurity.gov.

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About the Author

Jim Borland, Acting Deputy Commissioner for Communications

Jim Borland, Acting Deputy Commissioner for Communications

Comments

  1. Stanley B.

    A communist would be attacking their owners even more so than the players whose literal blood, sweat, and tears the owners exploit. Complaining about players’ salaries but not owners’ doesn’t sound communist. It sounds like someone who thinks more about celebrities than systems. That’s way more a cognitive bias of capitalism than communism.

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  3. maggie

    i don’t get why i paid into social security all of my working life then when i reached 66 i retired and got a job. Now because of the tax structure created by obama i now have to pay taxes on my ss benefits. How can the govt tax a tax. It is not earned income, it’s like a savings contribution over the years that i am reimbursed. It seems illegal and abusive and just plain wrong! and don’t give me all the crap about how much i earn…i am happy to pay taxes on my EARNINGS.

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