CHAPTER3

How Social Security Works

In This Chapter

  • Uncovering the secrets behind Social Security
  • Where does all the money go?
  • Who pays into the fund and who doesn’t
  • A brief overview of qualifying for benefits

The answer to how Social Security works is simple: you and I, along with our employers, pay taxes under the Federal Insurance Contributions Act (FICA) that go into a trust fund that pays Social Security benefits.

Sounds pretty simple, right? In reality, to finance this vast program, the Social Security Administration (SSA) relies on a number of complex formulas and regulations that would give a nuclear physicist a headache.

Is It Really ...

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