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CandleFocus Glossary Editor-program.png)
The Old Age, Survivors, and Disability Insurance (OASDI) program was established in 1935 as part of President Franklin Roosevelt's New Deal. 4 The goal of the program was to provide income to retired adults and those who were unable to work due to illness or injury. The program, which is entirely separate from Social Security disability benefits, is funded through payroll taxes deducted from employees’ wages each pay period.
Employers and employees both contribute 6.2% of works wages, while the self-employed pay both portions, amounting to 12.4%. 5 The contributions are collected and placed into the Social Security Trust Fund, which is managed by the federal government. 6 The Social Security Trust Fund provides benefits to individuals who've earned them from their work history. 7 Benefits are also available for their spouses, minor children, and in some cases, adult children. 8
The amount of an individual's monthly benefit is based on the amount earned during their 35 highest-paid years of work. 9 For example, an individual who earned the maximum Social Security taxable earnings for 35 consecutive years will receive the maximum Social Security benefit. 10 Those who worked for fewer years, or earned a lower income, will receive a reduced benefit.
Although the Social Security program is sometimes viewed as a retirement system, it is important to note that it is also a safety net for Americans who have disabilities. 11 The Social Security’s Disability Insurance program provides income to people who are physically or mentally unable to work and have exhausted their sick leave. 12 This program has been especially advantageous during the COVID-19 pandemic, when a number of people have had to apply for Disability Insurance due to the public health crisis.
Benefits through the OASDI program have helped millions of Americans, especially those who could least afford to lose out on their wages. 13 It is an invaluable safety net for people of all ages and helps many of them support themselves and their families. 14 The Social Security Trust Fund is also meant to provide financial benefits to those whose wages were diminished by illness or injury, or even by retirement. It is a fundamental part of our social safety net and necessary for vulnerable Americans who need financial help to make ends meet.
Employers and employees both contribute 6.2% of works wages, while the self-employed pay both portions, amounting to 12.4%. 5 The contributions are collected and placed into the Social Security Trust Fund, which is managed by the federal government. 6 The Social Security Trust Fund provides benefits to individuals who've earned them from their work history. 7 Benefits are also available for their spouses, minor children, and in some cases, adult children. 8
The amount of an individual's monthly benefit is based on the amount earned during their 35 highest-paid years of work. 9 For example, an individual who earned the maximum Social Security taxable earnings for 35 consecutive years will receive the maximum Social Security benefit. 10 Those who worked for fewer years, or earned a lower income, will receive a reduced benefit.
Although the Social Security program is sometimes viewed as a retirement system, it is important to note that it is also a safety net for Americans who have disabilities. 11 The Social Security’s Disability Insurance program provides income to people who are physically or mentally unable to work and have exhausted their sick leave. 12 This program has been especially advantageous during the COVID-19 pandemic, when a number of people have had to apply for Disability Insurance due to the public health crisis.
Benefits through the OASDI program have helped millions of Americans, especially those who could least afford to lose out on their wages. 13 It is an invaluable safety net for people of all ages and helps many of them support themselves and their families. 14 The Social Security Trust Fund is also meant to provide financial benefits to those whose wages were diminished by illness or injury, or even by retirement. It is a fundamental part of our social safety net and necessary for vulnerable Americans who need financial help to make ends meet.