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