Blog Chapter 10

Social Security is the largest social insurance program in the United States.
It is the cornerstone of U.S. social welfare policy. It is a system where individuals are compelled

through payroll or other taxes to insure themselves against the possibility of loss wages, death or
disability. Retirement is another benefit of the Social Security system. Karger & Stoesz (2014).
Social Security and Medicare taxes are divided among several trust funds including the Old Age
and Survivors Insurance (OASI) trust fund (pays for retirement and survivor benefits) and the
federal Disability Insurance (DI) fund provides benefits to the disabled and their families. Karger
& Stoesz (2014).
There is a limit on the amount of earning that is subject to taxation for each year. For 2015 the
base is 118,500. www.ssa.gov/OACT/COLA/cbb.html
In 2015 the OASDI tax rate for wages is set by a standard of 6.2 percent for employees and
employers. The OASDI tax rate for self-employment is 2.90percent. Social Security general
benefit increases are based on increases in the cost of living that is measured by the consumer
price index. www.ssa.gov/OACT?COLA/.cbb.html such increases are called Cost of Living
Adjustment (COLA). It was determined that 1.7 percent COLA on Oct 22, 2014.