What is Social Security?
Social Security is probably the most popular federal program, yet most people know almost nothing about it. In practice, Social Security’s complex benefit formulas and rules make it difficult for people to understand how their retirement benefits will work. This paper explains what Social Security is and how it works. The first section explains what Social Security is and which programs are and are not part of Social Security. This includes a discussion about Social Security’s retirement, survivors, and disability programs. It also explains why Supplemental Security Income is not part of Social Security, even though it is administered by the Social Security Administration. How Social Security Is Financed The second section explains the payroll taxes that mainly finance Social Security and how they are paid. It explores the level of payroll taxes used to finance the system, how those taxes are collected, and what programs they fund. One fact that is often overlooked is that a worke
