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