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Social Security Primer

Social Security is a lifeline: In 1935, after bank failures and a stock market crash had wiped out the savings of millions of Americans, the nation turned to Washington to guarantee the elderly a decent income.  In those days, only a handful of workers had access to pensions from their employers or through State governmental pension programs.  Over half of America's elderly lacked sufficient income to be self-supporting.  The Social Security Act was enacted at the urging of President Franklin D. Roosevelt to create a social insurance program that would ensure workers would have a source of income after they retired.

 

Federal Income Security

Federal programs that support income security and health are often mistakenly characterized interchangeably. From television pundits to average citizens, we often hear someone refer to Medicaid when they mean Medicare; Supplemental Security Income benefits are often confused with Social Security benefits. The programs, although similarly named, are distinct in terms of purpose, financing and specific populations served.

 

Women and SS Benefits

While Social Security is a program that is vitally important to all Americans, it is especially important to the financial security of women. There are a number of reasons why this is so. First of all, women live longer than men. On average, women today who reach age 65 outlive men by four years. These additional years of longevity increase the risk that women may outlive their savings or that their pensions may lose their purchasing power.

 

Disability Insurance and Survivors

It is difficult to overstate the importance to the American people of the Social Security program.  For more than 80 years it has been America’s most successful and broadly supported social insurance program, providing economic protection for people of all ages.  It speaks to a universal need to address family uncertainties brought on by death, disability and old age. 

 


African Americans and Social Security

Social Security protects families in the event that a worker retires, becomes disabled or dies. These guaranteed insurance benefits are especially crucial to people of color who tend to have fewer alternative resources, become disabled at higher rates, and disproportionately rely on Social Security's family benefit features. Social Security provides many elderly African Americans with their sole or primary source of income in retirement. Today's African-American workers are concentrated in low-wage jobs that typically lack pension coverage. African Americans experience high poverty and underemployment, and have less ability to save and invest for retirement than most other Americans. 

 

Hispanic Americans and Social Security

Social Security protects families in the event that a worker retires, becomes disabled or dies. These guaranteed insurance benefits are especially crucial to people of color who tend to have fewer alternative resources, become disabled at higher rates, and rely on Social Security's family benefit features disproportionately. Social Security provides many elderly Hispanics with their sole or primary source of income in retirement.

 

Beneficiaries By Age

About four-fifths of all OASDI beneficiaries in current-payment status were aged 62 or older, including 22 percent aged 75–84 and 10 percent aged 85 or older. About 15 percent were persons aged 18–61 receiving benefits as disabled workers, survivors, or dependents. Another 6 percent were children under age 18.



How Social Security is Financed

Social Security is financed through a dedicated payroll tax. Employers and employees each pay 6.2 percent of wages up to the taxable maximum of $118,000 (in 2014), while the self-employed pay 12.4 percent.



Child Beneficiaries

About 4.3 million children receive approximately $2.6 billion in Social Security benefits each month because one or both of their parents are disabled, retired or deceased. Those dollars help to provide the necessities of life for family members and help to make it possible for those children to complete high school. When a parent becomes disabled or dies, Social Security benefits help to stabilize the family’s financial future.



Disabled Beneficiaries Aged 18-64

Payments were made to 13 million people aged 18–64 on the basis of their own disability. Sixty-two percent received disability payments from the OASDI program only, 27% received payments from the SSI program only, and 11% received payments from both programs.

Social Security Benefits By State

Facts on Social Security and aged SSI beneficiaries.

Average Monthly Benefit By Sex

Among retired and disabled workers who collected benefits based on their own work records, men received a higher average monthly benefit than did women. For those with benefits based on another person's work record (spouses and survivors), women had higher average benefits.




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