Many millennials believe that Social Security will not be around when they are ready to retire, but you are paying FICA or SECA taxes to support this program, so you should be knowledgeable about the current program.  (FICA – Federal Insurance Contributions Act tax) (SECA – Self Employed Contributions Act tax)

Social Security was set up in the 1930s during the depression. There are three programs. Most people know about the retirement program. There are two other programs. One is for disabled workers and another for survivors of workers who die before retirement.   80% of the benefits from Social Security go to people over 62 years old. The other 20% of funds go to the other two programs. Over 4 million children receive benefits from Social Security.

Social Security is 84% funded by payroll taxes paid by you and your employer. 13% of the funds supporting Social Security are sourced from the interest earned on special issue Treasury Bonds in the trust account. 3% of the funds come from taxes paid on benefits received.

The average benefit paid to retirees is $15,144 annually or $1,262 monthly. Currently, the highest benefit payment is $30,396 annually and $2,533 monthly. This tells you that some of you will need additional retirement funds if Social Security is still around in its present form when you retire.

You must work 40 quarters before you are covered by Social Security. Many women in the past did not qualify for this benefit, because they did not work long enough to gain eligibility.

You should pay attention to those bulletins you get from the Social Security Administration. Do they have a record of all your work? It is easier to correct an error when it occurs rather than correcting it in 40 years.

Will Social Security be around when you retire? Who knows, but the program will definitely not be in its current form. The retirement age will continue to lengthen out as we all live longer.   How it is funded and how benefits are paid out will probably change to strengthen the program.

Kowalczyk recommendation: Read this article about the current status of Social Security –   http://www.fool.com/retirement/general/2014/05/24/dispelling-the-greatest-social-security-myth-of-al.aspx#

Kowalczyk further information: www.ssa.gov is the official website of Social Security. This website from AARP gives you a glossary of terms used at Social Security – www.aarp.org

Kowalczyk comment: If you enjoy this blog, please pass the website along to your friends and family.