The Social Security program is legislated by the federal Social Security Act and is designed to protect workers against loss of income caused by retirement, disability, or death. The Medicare program provides both medical and hospital insurance. Social Security is financed by taxes collected from both employers and employees. The Social Security tax is also known as FICA (Federal Insurance Contributions Act).
Social Security...a foundation for building a secure retirement
A secure, comfortable retirement is every worker's dream. And now because people are living longer, healthier lives, they can expect to spend more time in retirement than our ancestors did. Achieving the dream of a secure, comfortable retirement is much easier when an employee plans their finances.
Social Security benefits are the foundation on which an employee can build a secure retirement. They will need to supplement their benefits with a pension, savings or investments.
Today, only a little more than half of all workers have employer-sponsored pensions, and people are not saving as much as they know they should. While Social Security replaces about 40 percent of the average worker's pre-retirement earnings, most financial advisors say that an employee will need 70 percent of pre-retirement earnings to live comfortably. Even if an employee can count on a pension, they will still need to save. If an employee does not have a private pension, they will need to save more-and start sooner.
Will Social Security be there when your employees retire? Of course it will. But changes will be needed to meet the demands of the times. Most people are living longer, healthier lives; 76 million "baby boomers" will start retiring in about 2010; and, in about 30 years, there will be nearly twice as many older Americans as there are today.
