Did You Know: Understanding the myths and facts about Social Security
While starting my day like many Americans, scrolling through my phone with a pastry in my hand and a beverage, I came across the usual stream of political commentary on social media. One video caught my attention because it referred to Social Security as an “entitlement” in a way that seemed dismissive and misleading.
I found myself wondering how something that millions of Americans have contributed to throughout their working lives could be so purposefully manipulated for clickbaits. Rather than accepting someone else’s opinion, I decided to do what I believe is most important: research the facts. I wanted to better understand what Social Security is, why it was created, how it is funded and who is eligible to receive benefits. What I discovered gave me a much greater appreciation for one of the nation’s most important social insurance programs and reminded me of the value of seeking reliable information before forming an opinion.
Did you know that Pennsylvania residents follow the same Social Security retirement rules as everyone else in the United States? Social Security is a federal program, meaning eligibility does not change from state to state.
Most people become eligible for retirement benefits after earning 40 work credits, which generally equals about 10 years of work in jobs where Social Security taxes are paid. While benefits can begin to be taken as early as age 62, claiming before full retirement age results in a permanently reduced monthly benefit. Full retirement age is 67 for anyone born in 1960 or later, while it ranges between 66 and 67 for those born earlier. According to the Social Security Administration, waiting until age 70 increases monthly payments because of delayed retirement credits.
Did you know that the primary purpose of Social Security is to provide financial stability throughout life’s major transitions? Established in 1935, the program was designed to replace part of a worker’s income after retirement while also providing benefits to eligible individuals with disabilities, surviving spouses, dependent children and certain family members.
Rather than serving as a personal savings account, Social Security operates as a social insurance program that helps reduce poverty among older adults and provides financial protection when unexpected events occur.
Did you know that today’s workers help fund today’s Social Security beneficiaries? The program is financed primarily through Federal Insurance Contributions Act (FICA) payroll taxes. Employees and employers each contribute 6.2% of wages, for a combined Social Security contribution of 12.4%. Self-employed individuals generally pay the full amount through self-employment taxes. These payroll taxes are deposited into Social Security trust funds, which are used to pay current retirement, survivors and disability benefits. Because the program relies on ongoing payroll contributions, maintaining adequate funding is an important part of its long-term sustainability.
Did you know that many different people may qualify for Social Security benefits? Retired workers who have earned enough work credits are the most familiar recipients, but eligibility also extends to certain spouses, divorced spouses, widows, widowers, dependent children and workers who become disabled before retirement.
In Pennsylvania, public employees may also participate in Social Security depending on their employment coverage under federal and state agreements. Ultimately, eligibility is determined by a person’s work history, payroll tax contributions, age and family circumstances, not by simply reaching a certain birthday, according to the Pennsylvania Department of Labor & Industry.
For more information, visit ssa.gov
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