What do Social Security Taxes go towards and how does this work?

Question:  What exactly do my Social Security taxes pay for?

Response:  When you work and pay Social Security taxes, you earn Social Security credits that can count toward your retirement benefits, and may qualify you and your family for disability and survivors insurance coverage.  Most people need to work 10 years (40 credits) to think about filing for social security retirement benefits.  If you have some years of little or no earnings, your benefit amount may be lower than if you had worked steadily.  If you start receiving your retirement benefits at age 62 (the earliest possible retirement age) your benefits will be lower than if you wait until your full retirement age of 65.  When you pay Medicare taxes, you are earning Medicare protection that can be available to you when you reach age 65 or become disabled.  An experienced Social Security lawyer may also be able to explain the system to you.

Answered by Jan Hill

Additional Resources: www.socialsecurity.gov/planners

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