Social Security Tax System

2069 WORDS

Social Security Tax System
Revamping Our Future Social Security Tax System
paper will discuss the current United States Social Security Tax system, the
purpose of that system and our goal for selecting this topic. Also, it will
explain our analysis of it's current standing, different idea's about what to
change in our current standing to secure and guarantee a strong future for it.

We will conclude by recommending the best course to accomplish this goal.

Contents Abstract 2 Contents 3 Title 4 Current U.S.A. Social Security Tax System

4 Low Risk Investment 7 High Risk Investment 8 Graph: Social Security Tax

Increases 9 Conclusion/Recommendations 11 References 12 Revamping Our Social

Security Tax System to Secure its future Current U.S.A. Social Security Tax

System Social Security has been around for more than 60 years. It has been an
important part of American life. It was created in 1935 shortly after the great
depression. Social Security was created to be a protection for the American
people against the hazards of unemployment, old age, and ill health. Today

Social Security not only provides minimum protection for the retired worker, it
also provides benefits for workers and their families due to death of a family
wage earner or loss of income due to disability. Today there are about 150
million workers who are protected by social security, more than 44 million
receive retirement, survivors and disability benefits form social security.

American wage earners and their families are protected by social security and
they pay taxes to help make the system work. There are two philosophies Social

Security bases its payments on. First, the system is designed so that there is a
link between how much a wage earner pays into the system and how much he or she
will receive in benefits. For example, a high wage earner will receive more
benefits while a low wage earner will receive less. Second, a base for economic
security is provided by the Social Security system. Social Security provides a
valuable package of retirement, disability and survivors insurance, which
relieves families of financial burdens from supporting other family members.

Social Security has made an enormous difference in the lives of older Americans.

American workers can retire as early as age 62. At this age, wage earners are
eligible to get reduced benefits from Social Security. Wage earners may wait for
full retirement age to be eligible for full retirement benefits. Currently, full
retirement age is 65, but will be moved up gradually starting in 2003. The new
retirement age will be 67 for people born in 1960 or later. Social benefits
payments are paid out to more than 9 in 10 retirees. In America, only 11 percent
of senior citizens live in poverty. Without Social Security benefits, the
percentage of seniors living in poverty would be much higher. Social Security is
the major source of income for about two-thirds of elderly Americans, and for
abut a third Social Security is virtually their only source of income. Retired

Americans are given a dependable monthly income from Social Security. Automatic
increases are tied to increases in the cost of living. Social Security gives
retired American citizens a measure of deserved financial independence (and that
measure is becoming lower every year). Social Security is more than a retirement
program. It is also a protection plan for American citizens. Valuable disability
and survivors' insurance protection are given to younger wage earners and their
families. There are about 1 in 3 workers who are Social Security beneficiaries
that are not retired. Monthly survivors' benefits are given to about 7.5 million
people and more than 6 million workers and family members receive disability
benefits. Social Security provides a foundation on which to build retirement
security. Social Security, pensions and savings is a three-legged financial
stool for a comfortable retirement. Unfortunately, there is only a little more
than half of all workers whose employers have pension plans; and people are not
saving for their future retirement. Pre-retirement earnings for the average
worker are about 40 percent, provided by Social Security. Financial advisors say
that the average worker will need 70 percent of pre- retirement earnings to live
comfortably. Saving is an important part of retirement planning. Social Security
will begin mailing statements to workers age 25 and older. The statement will
show a worker's earnings history, as well as giving estimates of retirement,
survivors and disability benefits. This statement will help with future
financial planning. Demographics have been the main reason for Social Security's
long-range financing problem. People, today, are living longer and healthier
lives. In 1935,

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