What Is Social Security?

At its heart, Social Security is founded on a simple principle - you put money in when you work, and when you cannot work you take money out. We've all heard of Social Security and know that it provides retirement benefits. While the majority persons receiving Social Security payments receive retirement benefits, Social Security provides benefits in a variety of situations. Social Security provides benefits to disabled persons, spouses and dependent children of Social Security beneficiaries, widows, widowers, or dependent children of a deceased individual, and to other persons in various situations. In all, 45 million Americans receive some form of Social Security benefit.

Social Security is primarily funded through payroll taxes. The money you put into the Social Security system is not put into a personalized account with your name on it. Instead, the money you contribute is put into a massive trust for everyone. From this massive trust Social Security pays out all of its benefits.

On average, about 15 cents of every dollar contributed to Social Security pays benefits to disabled persons and their families. Social Security Disability Insurance (SSDI), the chief Social Security Disability benefit, pays benefits to individuals who become disabled and are unable to work for a year or more. Social Security helps disabled persons return to work, and will continue to pay disability benefits until he or she is able to work again on a regular basis.