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Understanding Social Security

 

Social Security is one of the largest and most important government programs in the United States. Established in 1935 during the Great Depression, it was designed to provide financial security to retirees, people with disabilities, and surviving family members of deceased workers.

 

The program is funded primarily through payroll taxes paid by workers and employers. Every paycheck includes a deduction known as the FICA tax (Federal Insurance Contributions Act), which goes toward Social Security and Medicare.

Workers earn “credits” toward Social Security benefits over their careers. Generally, someone must accumulate at least 40 work credits (about ten years of work) to qualify for retirement benefits.

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