FIN-2860 Chapter Notes - Chapter 15: Savings Account, Pension, The Employer
13 Dec 2020
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When you purchase social security, you"re purchasing mandatory insurance that provides for you and your family in the event of death, disability, health problems, or retirement. Shows on your pay slip as fica for the federal insurance contributions act. Roughly 95% of all americans are covered by social security. To be eligible all you have to do is pay into the system. The size of your social security benefits is determined by your number of years of earnings, your average level of earning, and an adjustment for inflation. If you delay retirement you can increase your social security benefits. Under a defined-benefit plan, you receive a promised or "defined" payout at retirement. These plans are generally noncontributory retirement plans, which means that you don"t have to pay anything into them. (with a contributory plan, you and your employer do pay into the plan)
