1. Social Security 101 What’s In It For Me?

2. Social Security Program The I stands for I nsurance OASDI Act of 1935 O ld A ge S urvivors D isabled Individuals who are retired Individuals who are the spouses or children of deceased individuals Individuals who are unable to work due to severe disability

3. Federal Insurance Contributions Act (FICA) Your FICA taxes fund the social security program. The social security portion of FICA tax is 6.2% of you gross income; your employer matches what you pay. As of 2013, you only have to pay FICA taxes on the first $113,700 of income.

4. Your FICA taxes are not held in a private account for you to use when you retire. Instead, they pay current beneficiaries. Your future social security benefits will be paid by future workers.

5. Social Security Cards The Social Security Administration (SSA) issues social security numbers usually at birth so they can keep track of your social security tax payments and benefits. Your employers ask you for your social security number so they can report your earnings and forward your tax withholdings to the SSA.

6. Work Credits You must have earned 40 work credits in order to receive social security benefits. You can earn up to four credits each year. In 2013, you have to earn $1,160 in order to earn one credit.

7. Benefits The Social Security Administration will calculate your retirement benefits based on an average of your 35 highest earnings years. As of 2013, the earliest you can start collecting social security payments is age 62. However, if you retire at this age, you will not get your full benefits. To get your full benefit you must wait until age 67.

8. Factors Affecting Social Security People are living longer. People are having fewer children. 20% of the population will be over the age of 65 by 2035.

9. Financial Cliff Since 2010, the SSA has been paying out more in benefits than it collects in FICA taxes. The number of workers per social security beneficiary has plummeted from 41.9 in 1945 to 2.9 in 2010. The Social Security Trust surplus will be gone between 2030 and 2040.

10. Possible Solutions Reduce benefits. Raise the FICA tax. Seek additional funding from Congress.

11. Back-Up Plan Most experts feel you will need 70% of your pre- retirement earning just to live comfortably during your retirement years. However, social security only equals 40% of this amount for the average worker so you will also need other savings and investments.