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Retirement
Social Security |
Of the women who receive Social
Security benefits today, very few do so on their own work history. Instead, they receive
benefits because of their working husbands. Today, almost 60% of women are in the nation's
workforce. They are paying more Social Securities taxes, planning for retirement, and
qualifying for pensions at a faster rate. When they approach retirement, they'll be
eligible for more Social Security benefits than today's recipients.
Whether you are currently working, returning to work, or staying at home to raise
children, it's important for you -- as a woman -- to understand how Social Security
works. You need to know what benefits you're entitled and when you will receive them.
Let's begin by looking at the basics of Social Security. How it works. Why it exists. And
most importantly, where your money goes.
How does it work?
More than 140 million individuals pay
Social Security taxes. The money you pay into Social Security (through taxes in your
paycheck) goes to current Social Security recipients -- providing retirement, disability,
and survivorship benefits. Just as you pay today's benefits, you can expect the next
generation to pay for your benefits.
As a wage earner, you've probably seen the term FICA somewhere on your pay stub. FICA
stands for the Federal Insurance Contributions Act. This law authorizes Social Security
and Medicare taxes to be deducted from your paycheck each month. In other words, they are
"mandatory contributions". You pay 7.65% in to FICA -- 6.2% for Social Security
and 1.45% for Medicare.
Where Does My Money Go?
Each dollar you pay to Social Security goes to the following:
- Retirement and Survivor Benefits ($.69). Eligible retired workers are
entitled to monthly benefits if they have paid Social Security taxes during their working
years. The more you pay to the program, the more you will get back in benefits when you
retire. Survivor Benefits are paid every month to the spouse or children of a deceased
worker.
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