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Social Security Act

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Dictionary Says

Definition of 'Social Security Act'

A law enacted by President Franklin D. Roosevelt in 1935 to create a system of transfer payments in which younger, working people support older, retired people. Under the act, the government began collecting the Social Security tax from workers in 1937 and began making payments in 1940.
Investopedia Says

Investopedia explains 'Social Security Act'

The Social Security tax combines with the Medicare tax to form what is known as FICA, or the payroll tax. As of 2010, the Social Security tax rate was 6.2% and the Medicare tax rate was 1.45%. The total payroll tax of 7.65% is deducted from the employee's paycheck; the employer must make a matching contribution of an additional 7.65%. The employee effectively pays the entire tax, as the employer's matching requirement reduces what he is able to pay his employees. Thus, Social Security represents a tax of 12.4% on the employee in addition to Medicare taxes, federal income taxes, state and local income taxes, sales taxes and numerous other less-noticed taxes.

Articles Of Interest

  1.

    Maximize Your Social Security Benefits

    The plan's cost of living adjustments can provide protection against inflation.

  2. Avoid The Social Security Tax Trap

    Government benefits can cost you big money! Know the income thresholds before you file.

  3. Introduction To Social Security

    You've probably contributed to this fund, but will you reap the benefits? Find out here.

  4. How Much Social Security Will You Get?

    You've been paying in for years - now it's time to find out what the system owes you.

  5. Create Your Own Social Security Fund

    The government's Social Security program may not last forever - be prepared by setting up your own.

  6. Understanding The U.S. Tax Withholding System

    Understanding the origins of our tax withholding system is crucial to getting the most out of it.

  7. The History Of Taxes In The U.S.

    The number of taxes that we now consider a given did not always exist. Find out how they arose.

  8. 4 Unusual Ways To Boost Social Security Benefits

    Find out how to work the system to get the highest total benefits the law allows.

  9. Top 6 Myths About Social Security Benefits

    Misinformation on retirement benefits is common. We'll set the record straight.

  10. Austerity: When The Government Tightens Its Belt

    When a government tightens its belt in tough economic times the entire nation feels the squeeze.
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