Social Security is a cornerstone of the United States’ ssndob safety net, providing financial support to millions of Americans, particularly during their retirement years. Established in 1935 as part of President Franklin D. Roosevelt’s New Deal initiatives, Social Security was designed to address the economic challenges faced by older adults during the Great Depression. Over the years, it has evolved to become a crucial component of the nation’s social welfare system.
Key Components of Social Security:
- Old-Age and Survivors Insurance (OASI):
- The OASI program provides benefits to retired workers and their dependents. It is the primary component of Social Security and offers a reliable income stream to individuals who have contributed to the system through payroll taxes during their working years.
- Disability Insurance (DI):
- Social Security Disability Insurance provides financial assistance to individuals who are unable to work due to a qualifying disability. To qualify, applicants must meet specific criteria and have accumulated sufficient work credits.
- Supplemental Security Income (SSI):
- SSI is a needs-based program that supports low-income individuals, including those who are disabled, blind, or elderly. Unlike OASI and DI, SSI benefits are not tied to a person’s work history but are instead determined by financial need.
How Social Security Works:
- Earning Credits: Individuals earn Social Security credits based on their work history and income. In 2024, one credit is earned for every $1,510 in wages, up to a maximum of four credits per year. To qualify for retirement benefits, individuals generally need to accumulate 40 credits.
- Full Retirement Age (FRA): Full retirement age is the age at which individuals can receive their full Social Security retirement benefits. The FRA varies depending on the year of birth, ranging from 65 to 67 years.
- Claiming Benefits: While individuals can claim Social Security benefits as early as age 62, doing so before reaching full retirement age results in reduced monthly payments. Delaying benefits beyond the FRA can lead to increased monthly payouts, providing an incentive for individuals to work longer.