| Social security was established in 1937 as an | | | | Factors effecting how social security is used and |
| emergency net for workers of this nation. It was to | | | | planned by the administrations. |
| cover all workers and has grown to cover a wide | | | | 1. The life expectancy has increased by 34% since |
| range of benefits. These benefits are funded by | | | | 1938. By living longer the demand for retirement |
| worker payroll taxes and are paid into a fund | | | | benefits has increased causing rates paid by workers |
| managed by the federal government. | | | | to increase. |
| To be insurance and to receive benefits a worker is | | | | 2. The high birth rate of baby boomers has caused a |
| required to "pay in" for a minimum of 40 quarters (10 | | | | short term financial issue that has created some |
| years). The amount paid in will depend on the amount | | | | stress on the retirement fund. Once the baby boomers |
| of taxable income the worker earns. Current laws | | | | generation has passed through the numbers will be |
| require anyone earning up to $100,000 is taxed. Some | | | | more in line with past planning. |
| restrictions apply when calculating the benefit such as | | | | When social security was originally conceived |
| to be covered a worker must have been covered by | | | | President Roosevelt promised that the income benefits |
| at least 6 quarters of the past 13 calendar quarters. | | | | would not be taxed for income tax purposes. In 1984 |
| There are several ways to receive social security | | | | President Reagan changed the rules so that 50% of all |
| benefits. Here is a list of who can benefit. | | | | social security benefits were taxed. In 1992 President |
| Worker's benefit: This is a monthly payment payable | | | | Clinton changed the taxation rate to 85%. These |
| for life to either a retired worker or a disabled worker. | | | | current tax rates are still in effect. |
| Spousal benefits: This refers to a monthly income for | | | | Based on current projections, the social security |
| a spouse or a retired or disabled worker. | | | | administration has determined that enough funds are in |
| Child's benefit: This is a monthly benefit for a | | | | place to keep the plan solvent until 2075. A suggested |
| dependent child of a deceased, disabled or retired | | | | increase in the amount of income that is included in |
| worker. | | | | social security calculations from the current $100,000 |
| Widow's benefit: This is a monthly retirement income | | | | of taxable income to $125,000 will provide additional |
| for a surviving or former spouse of a deceased or | | | | solvency to the projected year of 2150. |
| disabled worker. | | | | |