Social Security

Definition

Social Security is a federal insurance program in the U.S. that provides benefits for retirees, the disabled, and the dependents of deceased workers. Workers pay into the system via taxes on their earnings, and these contributions fund the benefits paid out.

Example

After working and paying Social Security taxes for over 40 years, an individual decides to retire at age 67. They apply for Social Security and begin receiving a monthly benefit check from the government based on their lifetime earnings.