We’re Working Together to Secure Today and Tomorrow
Reading Time: 2 MinutesLast Updated: February 27, 2017
Your 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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Tags: FICA, retirement benefits, Social Security benefits, Social Security taxes, survivors benefits
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Jim Borland, Acting Deputy Commissioner for Communications
Jim Borland, Acting Deputy Commissioner for Communications
Comments
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Virginia O.
That’s wrong we shouldn’t be paying 75%tax out of our social security we work hard for our money …The government is wrong an the President should stay out of our Social Security. I work hard for my money. It’s not much but it mind Social Security ….
Lesly F.
I am disable and be 63 years old and I am an disability benefits tomorrow morning will be March first I not getting any penny’s and I have to pay my bills wow ssi checks will stop start March first I not going well with God
Celia
How come today’s retirees receive their full benefits from Social Security and the future retirees will not receive their full benefits? It should be equal that today’s and the future retirees’ receive full benefits from Social Security. How come you don’t cut the current retirees’ benefits to 75%? This is not fair since I pay 100% taxes into Social Security today. You need to fix the future payout to 100% benefits because today’s retirees are receiving their full benefits. You need to cut back on other government expenses to preserve Social Security.
Lesly F.
Ye yeah in God I trust in my God the father only one who know all my need and for every thank I believe on him for my needs
Marc
@Lesly Franvois: Does this “God” you trust so fervently in for “all your needs” write a check to your landlord every month? How about at the grocery store, the utility company, etc? Yeah, I thought not.
Vinod S.
I am an Indian national having worked in USA on L1visa and contributed to SS for 24 quarters.I am neither getting any SSbenefits nor any other assistance nor has my contribution been returned.can you pl enlighten of the exact position as per existing laws.
R.F.
Thank you for your question Vinod. Generally, individuals will need to have 40 credits, or 10 years of work paying Social Security taxes, to qualify for any type of Social Security benefit. In the United States, you can earn credits only by working in a job or your own business that is covered under Social Security. If you stop working before you have enough credits to qualify for benefits, your credits will stay on your record. If you return to work later on, you can add more credits so that you can qualify. No benefits can be paid if you do not have enough credits. We hope this information helps.
Kumi A.
Is good to support those people, they need our help.
Jerry C.
Oh, by the way, Medicare got a good raise this year as Social Security gave everyone a generous .03 % raise this year to donate to Medicare. that adds up to a good raise for Medicare when you count all the people on SS. The USA has become one sorry rip off country. I have paid into both of those programs most of my life and now the united states criminal congress is trying to steal that. The reason SS is going broke now is the us criminal congress has stolen from SS over and over again in the past. If congress paid back what they have stolen from SS the SS program would be in good shape today.
R.F.
Hi Jerry. Any funds that have been “borrowed” from the Social Security Trust Funds have always been paid back in full, plus interest. Social Security is a pay-as-you-go system. Social Security taxes collected from today’s workers pay the benefits of today’s retirees. Any funds in excess of what is needed to pay today’s benefits are invested in special issue, U.S. Government, interest-bearing securities. This investment – the purchase of U.S. Government securities – is what constitutes the “borrowing” that people are sometimes concerned about. Investing in (i.e., purchasing of) bonds (including these special issue securities) is always a loan to the party that floats the bond – in this case, the U.S. Treasury. In 2014, the Trust Fund asset reserves earned $98 billion in interest at an effective annual rate of 3.6 percent through investment in these special issue U.S. Government securities. Please check out our Trust Fund Frequently Asked Questions page for more information.
Jerry C.
You are a joke.
Jerry C.
There may not be anything soon if they don’t make that Asshole Paul Ryan keep his damn hands off of it. He is a repub that someone needs to put some cement overshoes on.
Andrew
Thanks. This is a very informative post about current facts and future predictions of SSA.
R.F.
Thank you Andrew! We appreciate your support.
bettyg
you need to have article for people who have their own business & no employees … paying taxes, etc.
then when they apply, find out they are illegible; it’s complicated.
please address this important issue..thanks!
have SS ever been repaid for all the people “robbing paul to pay others”?
iowa recipient
AKA
Your comment makes no sense. Why don’t you start your own web site dedicated to those who can’t put 2 words together?