What Social Security Means For You

By: Jody Smith

Social Security may not have been something you thought about much when you were a wee young thing. But as time has passed and the scenario of future retirement begins to loom, Social Security begins to seem less like something for everyone else, and more like something for you.

The Social Security Administration agency regulates the safety net program called Social Security. In 2004, approximately 47 million people in the United States received basic Social Security benefits. Social Security in many cases is not enough for seniors to live on without other supplementation.

Tax-deferred accounts like 401(k) plans and IRAs are encouraged as investments to help in this supplementation. Social Security taxes, also known as payroll taxes or FICA taxes, are withheld by your employer from your earnings. Your employer also pays an equal amount to the Internal Revenue Service.

There are two types of taxes that are Social Security taxes. These are Old Age Survivors and Disability Insurance (OASDI) fund taxes, and Medicare taxes. Your employer will pay in an equal amount. People who are self-employed will pay in both of these amounts. Employees and employers each pay taxes on retirement income targeted for the senior Social Security program.

People who have had lower incomes get special treatment since they are the most vulnerable. For those who earned minimum wage, replacement rates for earnings will be about 60 percent. For those who earned average wages, replacement rates for their earning will be about 42 percent. For those who earned high wages, their replacement rate of earnings will be about 26 percent.

You'll receive a senior social security statement which shows earnings you've paid social security taxes on over the years you've worked. It will also indicate your estimated social security benefits. This estimate will help you to determine what you will be getting in the way of benefits after you retire.

You must be 62 years old in order to be able to get partial Social Security benefits. If you've earned 40 credits throughout the years that you have been employed, you will be able to get Social Security benefits.

On average, retired seniors were able to get $922 per month in 2004. Seniors who are disabled or whose spouse has died can receive a Supplemental Security Income or SSI, the maximum of which was $564 in 2004. Couples could receive a maximum of $846.

The Social Security program is meant to protect those who have had low incomes and who therefore aren't able to sock money away for retirement. The program is also a means of giving back to people who have paid taxes.

Jody Smith is a freelance writer for EmpowHER.com.

Sources:

What Will Senior Social Security Mean for You?

http://www.retirementfinances.com/senior-social-security

Retirement Planning - Your Social Security Benefits

http://www.seniorsite.com/retirement/retirement-planning-your-social-security-benefits.asp

Related Links:

The Rising Risk of Alzheimer's Disease in Baby Boomers

http://www.empowher.com/alzheimer039s-disease/content/rising-risk-alzheimers-disease-baby-boomers

Personal Care for Seniors: Great-Grandma Mabel's Experience at Home

http://www.empowher.com/caregiving/content/personal-care-seniors-great-grandma-mabels-experience-home

Diet and Exercise Together Help Combat Obesity in Your Golden Years

http://www.empowher.com/active-adult/content/diet-and-exercise-together-help-combat-obesity-your-golden-years

SHARE THIS STORY WITH YOUR FRIENDS!

More Sharing Options

X
  • Facebook

    SHARE NOW!

  • Twitter

    SHARE NOW!

  • Email

    SHARE NOW!

  • Pinterest

    SHARE NOW!

  • Tumblr

    SHARE NOW!

  • Google+

    SHARE NOW!

  • Reddit

    SHARE NOW!

  • Flipboard

    SHARE NOW!

  • LinkedIn

    SHARE NOW!

  • StumbleUpon

    SHARE NOW!

  • Digg

    SHARE NOW!

  • We Heart It

    SHARE NOW!