Social Security

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Social Security is a program funded by the federal government that provides three kinds of benefits: a monthly retirement pension benefit, a disability insurance benefit, and in the event of your death, benefits for your survivors - typically certain members of your family. These benefits are paid for by the federal Social Security Trust Fund; this fund is funded by a tax on employees and employers. The federal act that imposes this tax is the Federal Insurance Contributions Act, usually referred to by its initials as FICA. For this reason the tax is sometimes known as the FICA tax, and it is comprised of two parts: Social Security tax, which funds Social Security benefits, and Medicare tax, which helps fund the Medicare program. See also Payroll Tax and Medicaid.