What Is FICA on a Paystub?
Paystubs can be difficult to understand. Between the Federal and State income taxes, the Medicare tax and the FICA tax (or Social Security tax), you wonder where all your hard-earned money is going. The FICA tax, at least, is going towards your retirement.
Other People Are Reading
-
Meaning
-
According to the Social Security Administration, "Social Security payroll taxes are collected under authority of the Federal Insurance Contributions Act (FICA). The payroll taxes are sometimes even called 'FICA taxes.' "
Significance
-
The Social Security Administration states, "The payroll taxes collected for Social Security are of course taxes, but they can also be described as contributions to the social insurance system that is Social Security."
-
History
-
The Great Depression changed many things for the United States, one of them being the implementation of The Committee on Economic Security (CES). In 1935, the CES created the Social Security Act, which was signed into law by President Franklin D. Roosevelt.
Retirement Benefits
-
At age 62, you can begin to receive monthly checks from the Social Security system. It's important to note that if you wait to until age 65 to receive benefits, the Social Security amount will be significantly larger. Because of this, there are differing views on when you should start taking your benefits.
Family Benefits
-
On your passing, your spouse and minor children (up to age 18) can receive your Social Security benefits.
-
References
Resources
- Photo Credit Image by Flickr.com, courtesy of borman818
