The Social Security system began operation in 1940. It was a necessary step, according to President Franklin D. Roosevelt, for protecting average Americans who survived the Great Depression and faced difficult times heading into World War II. Taxes originally funded the system from deductions from wages earned by potential beneficiaries. The source of funding for the Social Security system remains constant. All people who earn income today must pay federal taxes in exchange for potential assistance. Assistance is available for retirement or if becoming disabled.
Social Security Obligations
Payment of federal income tax is mandatory. The Social Security Act provides for the collection of taxes by either of two ways. Employers deduct a percentage of all employee wages earned for payment into the system and then match each employee contribution. Currently, the employee deduction is 6.2% and employers contribute an additional 6.2% for the benefit of each employee. Self-employed taxpayers pay a 12.4% tax on net income. These taxes are payable the IRS on an annual basis. No taxpayer may opt out of the payment of these taxes even if waiving all rights and entitlement to future benefits.
Benefits of Participation
All citizens and legal residents within the boundaries of the United States may claim Social Security benefits. Retirement income eligibility is based on the age of each applicant. The minimum age required to receive full retirement benefits is 65 years of age for the oldest citizens and ranges up to 67 years of age for future generations. The amount of benefits potentially available is based on the level of contributions made over a lifetime. In addition, any person who becomes disabled may also qualify for immediate benefits. Of course, any person may choose to decline any amounts offered.