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Social Security
Heritage Foundation - How Today's Social Security Works
Social Security is probably the most popular federal program, yet most people know almost nothing about it. In practice, Social Security’s complex benefit formulas and rules make it difficult for people to understand how their retirement benefits will work.This paper explains what Social Security is and how it works. The first section explains what Social Security is and which programs are and are not part of Social Security. The second section explains the payroll taxes that mainly finance Social Security and how they are paid. The third section explains what Social Security’s trust funds are and are not. The fourth and longest section discusses how Social Security benefits are calculated and who is eligible to receive them. A companion paper will discuss the fiscal problems facing the current system and why changes are necessary. All of the information contained in this paper comes from Social Security Administration (SSA) sources.