Yahoo! Finance Live breaks down the functions of the U.S. Social Security program and how Americans can claim or contribute to these funds.
Who are the Beneficiaries of Social Security?
According to Dave Briggs, the taxes paid by American workers are the main source of funding for Social Security. The Social Security Administration (SSA) allocate the tax money to pay out benefits to the following group of people: (1) people who have already retired; (2) people without qualifying disabilities; (3) survivors of workers who died; and (4) dependents of beneficiaries.
See: Social Security Benefits: Learn How to Live a Comfortable Life
How Much Taxes Do I Pay for 2023?
Social Security taxes are paid depending on the taxpayer’s earnings up to a certain amount. In 2023, Social Security taxes are 6.2% of gross wages up to $160,200. It means an individual employee can pay up to $9,932 this year. Eventually, when it is time for your retirement or to claim your benefits, you will receive payments from the taxes of younger workers.
See: Is it a Good Idea to Forfeit Social Security Benefits?
What Age Can I Claim the Social Security Benefits?
You can start claiming the Social Security benefits at 62, but you can receive more benefits if you claim them later. You can receive more money if you claim it at the full retirement age of 66 or older.
See: Age of Full Retirement to Be Raised to 70 Under New Social Security Plan
Is it True Social Security is Facing a Problem?
According to the Social Security board of trustees, the latest annual report projects a depletion of Social Security’s cash reserve by 2034. If there are no changes in policy or immediate solutions, the annual taxes might only cover about 78% of benefits every year after 2034.
Find Out: Looming Insolvency of Social Security – Experts Propose a Tax Cap