Seeing taxes taken out of your paycheck can be confusing when you get your first paycheck. But understanding how important your contribution is can help. Your taxes are helping millions of Americans — wounded warriors, the chronically ill, and people with disabilities — as well as protecting you and your family for life. You can take pride in knowing you’re making an important impact with each paycheck.
By law, employers must withhold Social Security taxes from a worker’s paycheck. While often referred to as “Social Security taxes” on an employee’s pay statement, sometimes the deduction is labeled as “FICA” which stands for Federal Insurance Contributions Act, a reference to the original Social Security Act. In some cases, you will see “OASDI” which stands for Old Age, Survivors, and Disability Insurance.
The taxes you pay now translate to a lifetime of protection — for retirement in old age or in the event of disability. And if you die, your family (or future family) may be able to receive survivors benefits based on your work as well.
Because you may be a long way from retirement, you might have a tough time seeing the value of benefit payments that could be many decades in the future. But keep in mind that the Social Security taxes you’re paying can provide valuable disability or survivors benefits now in the event the unexpected happens. Studies show that of today’s 20-year-olds, about one in four will become disabled, and about one in eight will die before reaching retirement.
If you’d like to learn a little more about Social Security and exactly what you’re building up for yourself by paying Social Security taxes, take a look at our online booklet, How You Earn Credits, at www.socialsecurity.gov/pubs/10072.html.
If you have a friend who lost a parent when they were a child, they probably got Social Security survivors benefits. Social Security helps by providing income for the families of workers who die. In fact, 98 of every 100 children could get benefits if a working parent dies. And Social Security pays more benefits to children than any other federal program. You can learn more at www.ssa.gov/benefits/survivors/.
Do you prefer videos to reading? Check out the webinar, "Social Security 101: What's in it for me?" The webinar explains what you need to know about Social Security. You can find it at www.socialsecurity.gov/multimedia/webinars/social_security_101.html as well as on YouTube at http://www.youtube.com/watch?v=5hkLaBiavqQ.
Social Security is with you through life’s journey. You can learn more at http://www.socialsecurity.gov.