Although we all hate seeing the money come out of our checks on payday, Social Security acts as a safety net for many Americans whether they be retired, disabled, or the survivors of the insured. The program has been around for almost 90 years, yet a lot of Americans don’t know much about it or how it actually functions beyond how it affects the bottom line on their paychecks.
When the Social Security Administration began, it covered workers in just over half of jobs within the United States. Today, coverage is nearly universal. The old phrase, “saving money for a rainy day” comes to mind when considering how the SSA functions. Americans pay into the program out of their salaries and this money accrues over time. Later, when they retire – or become injured or disabled – they are able to reap the benefits of the program. (Here are 10 tips to get the most out of your Social Security income.)
The SSA operates as the largest government program in the United States numerically speaking, and this fiscal year (2022) the agency expects to pay out a whopping $1.2 trillion in benefits to some 66 million individuals. For comparison, the fiscal 2022 national defense budget came in at $777.7 billion.
While some people supplement their retirement savings through annuities, 401ks, or IRAs, many rely on Social Security, or at least in part, so the more beneficiaries – or potential beneficiaries – know about the program, the better. (See what it costs to retire comfortably in every state.)
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