Provides financial support during retirement

Provides income protection for workers and families in case of disability or death

Helps reduce poverty among older adults and survivors

Is: A federal social insurance program funded mainly by payroll taxes

Is: A foundation of income (not typically full income replacement)

Isn’t: A personal savings account or private investment plan

Isn’t: Means-tested welfare (eligibility is largely based on work history)

OASDI

SSI (Supplemental Security Income)

Employees and employers share Social Security taxes (self-employed pay both portions)

Taxes apply up to an annual earnings cap (taxable wage base)

Old-Age and Survivors Insurance (OASI) Trust Fund

Disability Insurance (DI) Trust Fund

Receives payroll taxes and other income; pays benefits and administrative costs

Federal income taxes on a portion of benefits for some recipients

Interest earnings on trust fund reserves

Earned by working and paying Social Security taxes

Most retirement benefits require a minimum number of credits (often 40, i.e., ~10 years of work)

Most jobs are covered; some exceptions exist depending on sector and specific rules

Workers with sufficient credits

Spouses and ex-spouses under certain marriage duration rules

Survivors (widows/widowers, dependent children, sometimes dependent parents)

Disabled workers and certain family members (SSDI-related)

FRA depends on birth year

Claiming at FRA yields the “full” scheduled benefit

Early claiming (as early as 62)

Delayed claiming (beyond FRA up to 70)

Break-even considerations

Earnings record

Average Indexed Monthly Earnings (AIME)

Primary Insurance Amount (PIA)

Cost-of-Living Adjustments (COLAs)

Spousal benefits

Divorced spouse benefits

Benefits for dependent children

Earnings test before FRA

After FRA

Recalculation

Must be medically determinable and expected to last at least 12 months or result in death

Must prevent substantial work (substantial gainful activity concept)

Sufficient work credits, including recent work requirements

Medical and vocational evaluation

Initial application (medical evidence and work history)

Determination services review

Appeals process

Based on earnings record, similar to retirement calculation principles

SSDI typically converts to retirement benefits at FRA (administratively)

Widows/widowers (including certain divorced spouses)

Children (minor, student under specific conditions, or disabled adult child)

Dependent parents (in limited cases)

Based on the deceased worker’s earnings record

Reduced benefits for early claiming by surviving spouse

Special rules for survivors caring for minor/disabled children

Total payable to a family on one record may be capped

Medicare is a federal health insurance program primarily for

Social Security often serves as the enrollment pathway and premium payment mechanism

Age-based eligibility

Disability-based eligibility

Special conditions

Part A (Hospital Insurance)

Part B (Medical Insurance)

Part C (Medicare Advantage)

Part D (Prescription Drug Coverage)

Medigap (Supplement Insurance)

Part B premiums

Part D and Medicare Advantage premiums

Higher-income premium adjustments

Initial Enrollment Period (around turning 65)

General Enrollment Period (if missed, with potential late penalties)

Special Enrollment Period (e.g., employer coverage situations)

Late enrollment penalties

SSI is needs-based; Social Security retirement/SSDI is work-based insurance

Funding

Eligibility

SSI often confers eligibility for Medicaid in many states (state rules vary)

Some beneficiaries owe federal income tax on a portion of benefits depending on total income

Taxability is based on combined income measures (SSA/IRS rules)

Monthly payments (timing depends on birth date or program category)

Direct deposit or prepaid card options

Overpayment causes

Resolution

Early vs. FRA vs. delayed to 70

Considerations

Higher earner delaying can increase survivor benefit potential

Understanding reduced survivor benefits for early claiming

Managing earnings test before FRA

Employer health coverage coordination with Medicare at 65

Program continues but may require policy changes to address funding gaps

Benefits vary based on earnings history and claiming age

Medicare is health insurance; Social Security is income support (with administrative linkage)

Withheld benefits can lead to later benefit recalculations

Review earnings record

Estimate future benefits

Manage direct deposit and communications

Online, phone, or in-person (availability varies)

Information typically needed

Medical documentation, treatment sources, work history

Importance of consistent medical records

Work/earnings changes (especially for disability and early retirees)

Address, banking, marital status, dependent changes

Benefit calculators and eligibility tools

Publications explaining retirement, disability, survivors, SSI

Medicare plan comparison tools

State Health Insurance Assistance Programs (SHIP) for counseling

Accredited benefits counselors or attorneys for appeals and complex cases

Financial planners for retirement income coordination