Social Security

SOC Final Exam

Why was Social Security created?

To address the risks and uncertainties in life - such as future health and income - and to compensate for the breakdown of traditional family-based care in a mobile, industrialized society

What kind of program is Social Security?

A form of social insurance, not welfare

Who receives Social Security benefits?

Retired workers, disabled workers and their families, and the families of deceased workers

Is Social Security means-tested?

No, it is not means-tested; eligibility is based on work history and contributions, no income or assets

How is Social Security funded?

Through FICA (Federal Insurance Contributions Act) payroll taxes, paid by both employees and employers

What percentage of earnings do workers contribute to Social Security via FICA?

6.2% of earnings, up to a wage cap of $176,100 in 2025

Do employers contribute to Social Security?

Yes, employers match the employee’s 6.2% contribution