Overview of What Each Social Security Benefits Offers for Employees
Social security benefits are benefits enjoyed by American citizens as instructed by the federal government. The benefits are financed by the employee and the employer on behalf of the employee through taxes. The employer throughout the salaried employee’s working career withholds a certain percentage of the employee earnings and adds his or her contribution to make payments for the total payroll tax for the Internal Revenue Services.
The amount contributed increase on yearly basis as individual salary increases. Individual employee is required to pay 6.2% of his or her salary to social security tax, with employer contribution being 12.4% and 1.45% to Medicare tax, with employer contribution being the same (NASI, 2018).
|Retirement||Life Insurance||Disability insurance||Medicare|
|Retirement benefits are structured to replace a portion of earnings of a worker from work. In this case, an employee making social security tax payment is entitled to retirement benefit which is part of their earnings. This money is used to offer economic security for workers upon retirement. The formula utilized to compute these benefits consider lifetime earnings for more than 35 years. Benefits of social security replace a huge share of previous earnings for low earners, but higher earners get bigger benefits, such that their benefits substitute a minute share of what they had been earnings.||Social security also offers life insurance to the workers where by their survivors benefit in case of death. The average monthly benefit to survivors of social security tax contributors is $1129 is one is a widower, widow or dependent child. It is estimated that about 98% of kids could enjoy life insurance benefits when a working parent dies.||Disability insurance is given to a worker who gets non-work associated illness or injury. Normally, workers who are injured at their workplace are compensated by the companies they work for. However, when this happens outside the workplace, the employee will go without any compensation and also loss the ability to generate more income in the future. Disability insurance is structured to fill this need, by paying monthly benefits to employees who are no longer capable of working as a result of a significant impairment or illness which is anticipated to last for about a year. The benefits can also be given to the family members of the disabled person (Metlife, 2013).||Medicare is the country’s primary healthcare program, for the elderly aged from 65 and above and individuals with disabilities. Medicare is divided into four parts with part A focusing on paying for inpatient services, part B focus on paying for doctors’ services and Part C is for extra or all health care services and part D is for prescribed drugs.|
The Most Critical Social Security Benefits for Employees
|Very critical||Critical||Less critical||Non critical|
|The most critical social security benefit for workers is the retirement benefits. This is money set aside during individual working lifetime to support him or her during the old age, after attaining official retirement age. Most previously employed individuals do not have any source of income at this age. They therefore depend on their portfolios and life savings to survive. Moreover aging and retiring is a thing that should happen to all individuals. Unlike disabilities, death and illnesses which can be highly discriminative, aging is a must to any worker who will not experience premature death. In this regard, retirement is the most critical social security benefit. It ensures that no previously employed individual become extremely poor and a dependent in their old age. While retirement benefits are not discriminative, one can only enjoy all other benefits under unique situation, for instance disabilities that are caused by non-workplace related causes (SSA, 2017).||The second most critical benefit is life insurance, the two; together with retirement benefits even takes the highest share of the contributed money. Life insurance ensures the survival of the dependents especially children in their parents’ death||Although all the benefits are important especially since they are based on things that happens in people’s life disability seams less critical than Medicare. Medicare ensures access to healthcare services at old age, which are highly needed as most elderly people do experience health issues.||Disabilities outside the workplace happens but at a lower degree and hence this benefit is only enjoyed by a few individuals|
Social Security Benefits that Carries the Highest Cost for Employers and for the Public
| The social security benefits which carries the highest cost for both the employer and the public is the retirement benefits. Social security funds comprising of survivors insurance or life insurance and old age or retirement package and the disability insurance. In this package, the employee contributes 6.2% while the employer contributes double which is 12.4%. |
The amount is divided into two packages that include retirement benefits and life insurance which takes 85% of this contribution. The amount is given to retirees and the surviving spouse and children of dead workers (NASI, 2018).
|Medicare is a separate contribution with the least amount of 1.45% for both the employee and the employer.||Disability insurance only gets 15% of the money contributed in the social security fund, where the disabled person and the family members get to enjoy this benefit.|