Social Security Huge Pile Of Collected Money Home Care Path

Try to think of Social Security as a huge pile of money that is continually being collected. Every worker pays about 6.2 percent of their wages up to a cap of 106,800.00, and employers pay the same. The money you contribute is a part of the total amount collected, and not set in an individual account.

The money collected over the lifetime of a worker who dies before receiving a social security check, stays with this huge pile of money. The contributed money stays in the fund from which benefits are distributed to workers and their families. Benefits may be distrinuted to a widower, a surviving divorced husband, dependent parents, disabled children, and children if they have not reached adulthood. No money collected is ever refunded because a contributing worker did not live to receive a redistribution.

The aging population has not snuck up on the Social Security Administration. To prepare for the baby boomers retirement, Social Security has collected more money than it pays out in benefits. Surplus collected money goes into a trust fund and are invested in United States guaranteed Treasury bonds. This trust fund contained about 2.5 trillion (2009 figures) in bonds and was earning about 4.9 percent in interest. These bonds are just as legitimate as U.S. Treasury bonds held by mutual funds, or foreign banks.

Looking at Social Security as a huge pile of money that is continually collected and slowly redistrbuted helps readers identify the interest in Social Security. Social Security is a huge pile of money, and political groups enjoy having control over money. Social Security has not contributed to the United States deficit. The huge pile of collected money is projected to be more than 4.3 trillion dollars by 2023.