Why does social security exist

Although it's unlikely that Congress will let the system go bankrupt, it's likely that belt-tightening changes will occur, including a longer waiting time until you qualify for full benefits and smaller benefits when you do. It is best for individuals to secure other retirement savings and not plan to rely on Social Security benefits as the chief source of their nest egg.

That's not a good idea now and won't get any better in the future. Social Security Administration. Department of Health and Human Services. Internal Revenue Service. Social Security. Retirement Planning. Actively scan device characteristics for identification. Use precise geolocation data. Select personalised content. Create a personalised content profile. Measure ad performance.

Select basic ads. Create a personalised ads profile. Select personalised ads. Apply market research to generate audience insights. Measure content performance. Develop and improve products. List of Partners vendors. Your Money. Personal Finance. Your Practice. Popular Courses. Retirement Planning Social Security. Part Of. The Future of Social Security. Table of Contents Expand. Who Will Be Affected the Most? According to the annual report of the Social Security Board of Trustees, the surplus in the trust funds that disburse retirement, disability and other Social Security benefits will be depleted by That's one year earlier than the trustees projected in their report.

That does not mean Social Security will no longer be around; it means the system will exhaust its cash reserves and will be able to pay out only what it takes in year-to-year in Social Security taxes. If this comes to pass, Social Security would be able to pay about 78 percent of the benefits to which retired and disabled workers are entitled.

While the boomers are swelling the ranks of retirees and living, and collecting benefits, longer , lower birth rates in subsequent generations mean there are fewer workers paying into Social Security. The coronavirus pandemic has also had an impact on the system's long-term finances, as large-scale job losses cut into the payroll tax revenue that largely funds Social Security. The upshot is that if no changes are made, the system will run through its reserve assets by , if not sooner.

The Medicare trustees report projects that fund will run out of reserves in , after which Medicare will be able to pay 91 percent of scheduled benefits. Find the answers to the most common Social Security questions such as when to claim, how to maximize your retirement benefits and more. You are leaving AARP. Please return to AARP. You'll start receiving the latest news, benefits, events, and programs related to AARP's mission to empower people to choose how they live as they age.

You can also manage your communication preferences by updating your account at anytime. Employees of the three branches of the federal government, were also covered starting in January , under the law--but with some special transition rules.

Rehired employees--other than rehired annuitants--are treated like new employees if their break-in-service was more than a year. Those who were in the CSRS system were given the same one-time choice as employees in the executive and judicial branches.

So there are still some Federal employees, those first hired prior to January , who are not participants in the Social Security system. All other Federal government employees participate in Social Security like everyone else. This change was part of the Amendments to Social Security. You can find a summary of the amendments elsewhere on this site.

Q9: What information is available from Social Security records to help in genealogical research? A: You might want to start by checking out the Social Security Death Index which is available online from a variety of commercial services usually the search is free.

The Death Index contains a listing of persons who had a Social Security number, who are deceased, and whose death was reported to the Social Security Administration. The information in the Death Index for people who died prior to is sketchy since SSA's death information was not automated before that date. Death information for persons who died before is generally only in the Death Index if the death was actually reported to SSA after , even though the death occurred prior to that year.

If you find a person in the Death Index you will learn the date of birth and Social Security Number for that person. We do not offer support of these commercial products nor can we answer questions about the material in the Death Index. Q Where do I get more information about the Social Security program as it exists today? A: Go to our Social Security Online home page. Q Who was the first person to get Social Security benefits?

A: A fellow named Ernest Ackerman got a payment for 17 cents in January This was a one-time, lump-sum pay-out--which was the only form of benefits paid during the start-up period January through December Q What is the "notch"? A: In a technical error was introduced in the law which resulted in beneficiaries getting a double adjustment for inflation. In Congress acted to correct the error.

Instead of making the correction immediate, they phased it in over a five year period this is the notch period. This phase-in period was defined as affecting those people born in Individuals in the notch generally receive higher benefits than those born after the notch, although they receive lower benefits than those born in the period prior to the notch when the error was in effect.

Q Where can I find the history of the tax rates over the years and the amount of earnings subject to Social Security taxes? Tax rate table. There is also a table showing the maximum amount of Social Security taxes that could have been paid since the program began.

There are also tables showing the minimum and maximum Social Security benefit for a retired worker who retires at age 62 and one who retires at age Also, there is a table showing the number of workers paying into Social Security each year.

Covered workers table And also a table showing the ratio of covered workers to beneficiaries. Ratio table. The payroll taxes are sometimes even called "FICA taxes. Q Is there any significance to the numbers assigned in the Social Security Number?

Generally, numbers were assigned beginning in the northeast and moving westward. So people on the east coast have the lowest numbers and those on the west coast have the highest numbers. The remaining six digits in the number are more or less randomly assigned and were organized to facilitate the early manual bookkeeping operations associated with the creation of Social Security in the s.

The project is a forward looking initiative of the Social Security Administration SSA to help protect the integrity of the SSN by establishing a new randomized assignment methodology. Q Does the Social Security Number contain a code indicating the racial group to which the cardholder belongs?