Social Security is a tax on earnings that helps pay for a retirement and disability benefit system.

When you retire, it does not come back to you with interest.

When you die, your family does not inherit your un-used contributions .

Although survivor benefits may be available if you received or were eligible for Social Security .

Social Security operates on a pay-as-you-go basis.

Today's workers contributions pay benefits to current retirees and disabled individuals.

In the case of Social Security, any money not needed to pay current beneficiaries remains in the trust fund. 

It is younger workers who will pay the retirement benefits of today's wage earners.  

Your retirement savings need to be supplemented

In other words, while Social Security exists to help Americans in their later years, it does not provide a means to save for retirement like an IRA or 401(k). 

It's a guaranteed benefit more akin to insurance, a fact that the government acknowledged... naming the program Old Age, Survivors and Disability Insurance (OASDI).  

In a similar way to how insurance premiums pay fellow policyholders when they make a claim...

...payroll taxes and self-employment taxes finance Social Security's benefit payments.  

The Social Security tax money earns interest collectively: It is invested in Treasury bonds guaranteed by the federal government.

However, your contributions don't earn interest for you. 

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