The Clean Little Secret of Social Security
Social Security has recently been under attack with misleading claims. The article below aims to set the record straight on Social Security by covering:
How Social Security works from a worker’s perspective
How it’s financed
Why maintaining the system is not as difficult as some claim
Social Security is a crucial government program supported by a dedicated payroll tax (FICA). Workers contribute 12.4% of their earnings (Workers contribute 6.2% of their earnings for Social Security tax and their employer matches it by also contributing 6.2%. If an employee is self-employed, they must contribute both the employer and employee portion to the IRS.), with benefits dependent on lifetime earnings. The program is progressive, offering greater support to lower-income workers. While Social Security doesn’t function like a traditional pension, its structure is designed to ensure sustainability.
In addition, FICA taxes include not only Social Security, but also 1.45% for Medicare tax. The match by employers is also applicable here. The only difference is that there is no league limit on Medicare taxes.
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