At first, seeing taxes taken out of your paycheck can be a little disappointing. However, you can take pride in knowing you’re making an important impact each week when you contribute to Social Security.
Understanding how important your contribution is takes some of the sting away because your taxes are helping millions of Americans — and protecting you and your family for life — as well as wounded warriors, the chronically ill and disabled.
By law, employers must withhold Social Security taxes from a worker’s paycheck. While usually referred to as “Social Security taxes” on an employee’s pay statement, sometimes the deduction is labeled as “FICA” which stands for Federal Insurance Contributions Act, a reference to the original Social Security Act. In some cases, you will see “OASDI” which stands for Old Age Survivors Disability Insurance.
The taxes you pay now translate to a lifetime of protection — for retirement in old age or in the event of disability. And when you die, your family (or future family) may be able to receive survivors benefits based on your work as well.
Because you may be a long way from retirement, you might have a tough time seeing the value of benefit payments that could be many decades in the future. But keep in mind that the Social Security taxes you’re paying can provide valuable disability or survivors benefits now in the event the unexpected happens. Studies show that of today’s 20-year-olds, about one in four will become disabled, and about one in eight will die before reaching retirement.
Be warned: if an employer offers to pay you “under the table,” you should refuse. It’s against the law. They may try to sell it as a benefit to you since you get a few extra dollars in your pay. But you’re really only allowing the employer to cheat you out of your Social Security credits.
If you’d like to learn a little more about Social Security and exactly what you’re building up for yourself by paying Social Security taxes, take a look at our online booklet, How You Earn Credits, at www.socialsecurity.gov/pubs/10072.html.
If you have a friend who lost a parent when they were a child, they probably got Social Security survivors benefits. Social Security helps by providing income for the families of workers who die. In fact, 98 of every 100 children could get benefits if a working parent dies. And Social Security pays more benefits to children than any other federal program. You can learn more at www.socialsecurity.gov/survivors.
Do you prefer videos to reading? Check out webinar, “Social Security 101: What’s in it for me?” The webinar explains what you need to know about Social Security. You can find it at www.socialsecurity.gov/multimedia/webinars/social_security_101.html as well as on YouTube at www.youtube.com/watch?v=5hkLaBiavqQ
You can also learn more at www.socialsecurity.gov.
Q: I recently retired and am approaching the age when I can start receiving Medicare. What is the monthly premium for Medicare Part B?
A: The standard Medicare Part B premium for medical insurance is currently $134 per month. Since 2007, some people with higher incomes must pay a higher monthly premium for their Medicare coverage. You can get details at www.medicare.gov or by calling 1-800-MEDICARE (1-800-633-4227) (TTY 1-877-486-2048).
Q: I recently applied for a replacement Social Security card, but I might be moving before it arrives in the mail. What should I do if I move before I get it?
A: Once we have verified all your documents and processed your application, it takes approximately 10 to 14 days to receive your replacement Social Security card. If you move after applying for your new card, notify the post office of your change of address and the post office will forward your card to your new address. If you do not receive your card, please contact your local Social Security office. To get a replacement, you will have to resubmit your evidence of identity and United States citizenship, or your lawful immigration status and authority to work. You can learn more at www.socialsecurity.gov.
Q: Why is there a five-month waiting period for Social Security disability benefits?
A: The law states Social Security disability benefits can be paid only after you have been disabled continuously throughout a period of five full calendar months. Social Security disability benefits begin with the sixth full month after the date your disability began. You are not able to receive benefits for any month during the waiting period. Learn more at our website: www.socialsecurity.gov/disability.