Q & A
How does Social Security measure up 80 years after being signed into law?
Answer: Generations of Americans have been protected against poverty thanks in large measure to this social safety net signed into law 80 years ago on August 14, 1935. Without question, Social Security is tightly woven into the social fabric of America. The fundamental foundation of the program hasn’t changed in the last eight decades. Payroll tax revenues are collected on wages (12.4 percent is evenly divided between employee and employer) that finance retirement and disability benefits. Any excess revenue not used to pay current benefits is invested in interest-bearing government securities. The Social Security trust funds reflect payroll taxes plus interest accrued. The 15-year bonds are managed within the U.S. Treasury. These IOUs are redeemed to pay current benefits. Read more…
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