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Social Security in the U.S.: What is it, and How Does it Work?

Social security is one of the bedrocks of life in the U.S. yet many people are unsure of what it is and how it works. In essence, Social Security is designed to provide support for Americans in need under a number of circumstances, things like retirement and disability programs. 

In order to make the most out of these services we recommend you learn more about how the Social Security Administration works, what benefits they offer, and how you can apply for them.

How Social Security Works

The current Social Security system in the U.S. works in the following manner

  • Throughout the time that you work, you’ll pay into Social Security through your taxes.
  • The SSA uses these taxes to pay benefits to:
    • Retired people
    • People living with disabilities
    • Surviving family members of deceased workers 
    • The beneficiaries’ dependents 
  • The taxes you pay toward Social Security aren’t kept in a personal account; the SSA uses this money to pay the corresponding benefits to people now, and the rest of the money is put into Social Security trusts. 

What is a Social Security Number in the United States?

A Social Security Number (SSN) is a nine-digit number that’s assigned to each U.S. citizen at birth. Non-citizens who have work permits that are granted by the Department of Homeland Security (DHS) also have to have one. The SSN is used to report income to pay taxes and determine eligibility for Social Security benefits. It’s also used as a de facto national identification number and is required for a variety of companies such as banks and creditors.

How can I get a Social Security Number?

The Social Security Number application process is simple and free. There are three types of people who can apply to get this number:  

  • People born in the U.S.
  • U.S. citizens born abroad 
  • Foreigners with U.S. work permits 

The documents you’ll need for this application depend on the conditions above, but the process is pretty similar for all applicants and consists of the following:

Bring the required documents 

The documents you need will depend on your immigration status and place of birth. Generally, you’ll have to bring proof of age, identity, and citizenship or immigration status with a work permit. To find a full list of accepted documents, check out this website.

Fill out the form

Once you have all the documents you need, you’ll have to fill out a SS-5SP application. This form has to be printed on letter-sized paper and filled out in black or blue ink. Make sure your writing is legible and that all the information is correct.  

Send your documents to the SSA

Once you have all your documents and filled out your application, you’ll have to send all these documents to a Social Security Administration Office or go to an office in person. To find the office nearest to you, call 1-800-772-1213 from Monday through Friday between 8:00 AM and 7:00 PM.  

Who is Social Security for?

The programs run by the SSA are for vulnerable populations within the United States. The largest groups of people who receive Social Security benefits are: people over 65, people with disabilities that affect their ability to work, and dependents of deceased workers.

Benefits of Social Security

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There are a lot of programs run by Social Security that benefit the country’s workers and their dependents. These programs provide help for different reasons, including: 

Medical Care

Medicare is a government-funded health insurance program for people over 65 and people with applicable disabilities. This program provides aid to cover medical expenses, but it doesn’t cover the cost of many treatments or long-term care. The SSA registers eligible beneficiaries in two parts of this program: 

  • Medicare Part A. This provides financial assistance for hospitalization and care in specialized nursing facilities (for post-hospitalization care.)  This part also pays for some home health care for terminally ill patients. 
  • Medicare Part B. This pays for medical consultations and other healthcare services such as outpatient care, home healthcare, permanent medical equipment, and other preventative services.  

Keep in mind: Medicare Part B requires a monthly premium payment. There are also private policies known as Medigap that can help you pay the deductibles and copays. 

Saving for retirement

Social Security has a  program that provides income to people after retirement. This program replaces a percentage of the income that you received before retirement. The amount of money that you’ll receive from Social Security after retirement will depend on the age that you choose to receive the benefits and the income you reported over the last 35 years when you received the most during your career. 

Keep in mind: 62 is the youngest age that you can start receiving SSA retirement benefits. However if you wait more time to start receiving these benefits, the amount of money you’ll receive will be greater. You can find more information about this important decision here

Social Security Benefits

The Supplemental Security Income (SSI) program provides financial support to disabled children and adults and people over 65 who don’t have disabilities but have limited income and resources. You can apply to receive SSI benefits if: 

  • You’re over 65, blind, or have a disability
  • You have limited income
  • You have limited resources (possessions)
  • You’re a U.S. citizen or were born in the U.S.
  • You reside in one of the 50 states, Washington D.C., or the Northern Mariana Islands. 

Death or disability

People insured by the SSA and their immediate family have the right to receive benefits when the worker is disabled or dies. This program is called Social Security Disability Insurance (SSDI). In order for you or your dependents to qualify, you have to have been registered and paid into Social Security and have a medical illness that the institution deems a disability. The illnesses considered to be disabilities have to have the characteristics:

  • Be an impediment to the substantial gainful activity (SGA) that you did before
  • Not allow you to resume the work you did before or adapt to another job 
  • Last at least a year or result in death

Other things to know about Social Security

The Social Security Administration is extremely important and affects everyone who lives in the United States. Below, we’ll share a few interesting statistics about this  government body: 

  • An average of 65 million people in the United States received monthly Social Security benefits in 2021. This represents over a billion dollars in benefits paid throughout the year. 
  • Social Security is the main source of income for elderly people.  
  • Approximately 176 million people worked jobs that were covered by Old Age, Survivors, and Disability Insurance (OASDI) in 2021.

Social Security protects you and your family! 

Programs managed by the SSA bring enormous benefits to the U.S. population. If you're eligible to sign up and still haven’t done so, we recommend that you do so as soon as you can. If you have any questions about this topic or any other, feel free to contact our team of experts, and a member of our team will be happy to help you. Thank you for reading, and remember:  ¡SABEResPODER!