You may have heard that the Social Security OASI (Old Age and Survivor Insurance) program is running deficits. This has been reported since 2011 and you might think the program is bleeding red ink. The truth is a bit more nuanced than these glib headlines suggest. Separating the facts from the exaggerations is confused by a number of factors including temporary tax holidays and definitions of cash flow.
Social Security is primarily (but not solely) funded by the payroll taxes which it collects on all employment income. There is a 5.3% payroll tax on the income of employees, plus 5.3% for employers. Self-employed individuals have the privilege of paying 10.6%; that is, the usual portion for both the employee and employer.
Register or login for access to this item and much more
All Financial Planning content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access