How is social security funded?

Answer 1

Social Security is funded by a wage tax. The employee pays 6.2% of all wages up to $102,000 (this is the 2008 maximim, it increases every year). The employer pays an equal amount for a total contribution of 12.4%

Answer 2

Legal businesses who employ individuals for work in exchange for money in the USA have a tax ID number that is unique and attached to all finances which is on file by the Internal Revenue Service (IRS) and the Federal Treasury Department (also known as FMS, Financial Management Services). To be a legal and legitimate employee, an individual employee must have a Social Security Number that is unique and attached to their personal full name, date of birth, city and state of birth and mother's maiden name and is kept on a Master Beneficiary Number file through their lifetime for earnings, taxes, identification, and other references. From each pay check earned for services, work, compensation or tips that an individual receives from their employer it includes a taxation from their gross earning that is set aside into an account for Social Security and Medicare. It is strictly money that comes from the EMPLOYEE only. The taxed funds do not include money from any other source: not the employer, the county, or state. It is from the worker's earned income only. It is not the same as Workers Compensation Fund. A person may have one employer his entire working career or he may have several, dozens, hundreds of different employers until he retires or becomes disabled and unable to do any gainful work. The uniquely identifiable Social Security Number assigned to you, the employee, follows your earning history and the special taxable amounts set aside into the Social Security and Medicare funds are always accruing and kept up to date. Therefore, when you retire from your profession, trade, skilled labor, etc., you notify Social Security Administration and begin to receive back all the moneys you paid into that fund which the Federal government taxed out of your paychecks in monthly benefit checks. So you receive a monthly check, a pension, regularly, from money which YOU EARNED AND SAVED for retirement or should a serious disability arise that forces you to stop working and begin receiving those funds. The funding in Social Security Administration to beneficiaries comes from THEIR paid work. It is not generated by the government itself nor public taxes: the social security administration check I received this month is actually money I saved while I was younger and able to work at my job. This is not to be confused with Social Security Insurance, known as 'SSI'. Social Security INSURANCE recipients receive a monthly stipend that is funded by state and county public taxes. Therefore, a small child can be a recipient of SSI, or a young blind person, or anyone who is ultimately unable to fend for themselves financially and would otherwise be unfed, without a home or the ability to pay for medication and living expenses necessary for survival. Due to our society's economic structure, this social insurance is funded by public taxes and is necessary for the health, safety and welfare of the general public. Without it, those who are unable to have adequate jobs and medical benefits for illness, medicine, hospitalization, childbirth, etc. would be at a total disadvantage, mainly through no fault of their own for whatever reason exists, to survive and would basically resort to desperate crimes to be able to eat, have shelter and live with the rest of the society. However, the beneficiaries of Social Security Administration Retirement are people who are receiving money they earned themselves and are classified different ways. Some are early retirement people, who became disabled and paid enough into their funds to collect it sooner; some are veterans who are retirement age or were injured while serving in the military forces; some are retired that worked for the railroad industry their whole working career, which is a major contributor and factor in our country's economic success. Others are spouses who did not work outside of the home but contributed by raising children and making sure they were educated and fed in a safe home so they could go on and become independent, self sufficient members in society and therefore are entitled to receive a retirement pension of their own from the husband or wife's working fund, because the Federal government and society recognizes that to be the same as being employed full time, even more so. We hope you have a better understanding and answer about how or where the funds come from regarding Social Security Administration's Retirement. It is a good question that many people think about often but is often overlooked when talked about or read in books and newspapers.

Answer 3

Social Security benefits are funded by each individual. Taxes are taken out of their salary and paid out after they reach their retirement years. The money was supposed to be set aside and receive interest for the individual who then supposedly gets it back when they retire in the form of social security benefits.

Answer 4

SSDI or social security disability insurance is a paid into program. People receiving it must have worked 20 of the last 40 quarters (5 consecutive years) and are paid money each month from what they put in as taxes. SSI or Supplimental Security Income is paid for by federal taxes.

Answer 5

Benefits are generally paid by state governments, funded in large part by state and federal

Answer 6

Social Security is funded through salary deductions.

Answer 7

Social Security is funded by payroll taxes which is also called as Federal Insurance Contributions Act Tax (FICA).

Answer 8

through a tax on workers' wages