Global HR Glossary

What is Social Security? 

Social Security is a comprehensive federal program that provides retirement, disability, and survivors' benefits to eligible individuals. It is funded through payroll taxes collected under the Federal Insurance Contributions Act (FICA). Social Security aims to provide financial support to retirees, disabled workers, and families of deceased workers.

Key Components of Social Security

• Retirement Benefits: Monthly payments to retired workers who have paid into the system during their working years.
• Disability Benefits: Financial assistance for eligible workers who become disabled before reaching retirement age.
• Survivors' Benefits: Payments to family members of deceased workers, such as widows, widowers, and dependent children.

Impact and Importance

• Economic Security: Provides a safety net for millions, reducing poverty among the elderly and disabled.
• Income Source: For many, it is a primary source of income during retirement.
• Contribution-Based: Benefits are based on the earnings history and payroll tax contributions of the individual or their spouse.