What is Social Security?
Social Security is the federal social insurance program created by the Social Security Act of 1935. Workers and employers each pay a 6.2 percent payroll tax on wages up to an annual cap, and self-employed people pay both halves. In return, the program pays monthly benefits when a worker retires, becomes disabled or dies, to the worker and to eligible family members. It's run by the Social Security Administration (SSA) and is the largest source of income for most older Americans.
Social Security is often confused with welfare, but retirement and disability benefits are earned through work and aren't means-tested. A separate program, Supplemental Security Income, does depend on financial need. Medicare, the health program for people 65 and older, is closely linked but legally separate.
- Payroll tax
- 6.2% each from worker and employer
- Eligibility
- 40 credits, about 10 years of work
- Full retirement age
- 67 if born 1960 or later
- Korean term
- 국민연금 (National Pension)
The same worker can get a monthly check roughly three-quarters larger just by waiting. Claiming at 70 instead of 62 can raise the benefit by about 77 percent.
Eligibility and work credits
Workers earn up to four credits a year based on earnings, and most need 40 credits, about 10 years of work, to qualify for retirement benefits. The benefit amount comes from the worker's average indexed monthly earnings over their 35 highest years, run through a progressive formula that replaces a larger share of income for lower earners. Spouses can receive up to half of the worker's full benefit, and divorced spouses can too if the marriage lasted at least 10 years.
When to claim: 62, full retirement age or 70
The full retirement age rose gradually from 65 and is now 67 for anyone born in 1960 or later. Claiming at 62 permanently cuts the benefit by up to 30 percent, while delaying past full retirement age adds 8 percent a year until 70. People who claim early and keep working may have benefits temporarily withheld under the earnings test. Benefits receive an annual cost-of-living adjustment tied to inflation, and up to 85 percent of benefits can be subject to federal income tax depending on other income.
Disability, survivors and SSI
Social Security Disability Insurance (SSDI) pays workers who can't do substantial work because of a medical condition expected to last at least a year or end in death, after a five-month waiting period. Survivor benefits go to widows, widowers and children of deceased workers. Supplemental Security Income (SSI) is different: it's funded by general taxes and pays a flat federal amount to people who are 65 or older, blind or disabled and have very limited income and assets, generally under $2,000 in countable resources for an individual. Denied claims can be appealed through reconsideration, a hearing before an administrative law judge, the Appeals Council and then federal court, as the Supreme Court discussed in Mathews v. Eldridge (1976).
- Helvering v. Davis (1937)
- Upheld Social Security's old-age benefits under the taxing and spending power
- Flemming v. Nestor (1960)
- No contractual property right to benefits; Congress can change them
- Mathews v. Eldridge (1976)
- No pre-termination hearing required for disability benefits
The trust fund outlook
Payroll taxes go into trust funds that pay current benefits. The 2025 Trustees Report projected that the combined retirement and disability trust funds would be depleted in 2034, after which incoming taxes would still cover about 81 percent of scheduled benefits unless Congress acts. Options include raising the payroll tax cap, raising the tax rate, slowing benefit growth or raising the retirement age. Because benefits are set by statute, Congress can change them, as the Supreme Court held in Flemming v. Nestor (1960). How federal and state roles divide in social programs is explained in federalism.
How Korea compares
Korea's National Pension began in 1988 and covers almost all working people aged 18 to 59. Ten years of contributions qualify a person for an old-age pension, and the starting age is rising from 63 to 65 by 2033. In March 2025 the National Assembly passed the first major reform in 18 years: the contribution rate rises from 9 percent by half a point a year starting in 2026 until it reaches 13 percent, and the target replacement rate becomes 43 percent. A separate tax-funded Basic Pension goes to the poorer 70 percent of people 65 and older.
Korean papers on Why Social Security Benefit Rights Are Fragile in Korea: Protection From Assignment and Seizure, Adverse Changes, Limits and Waiver and Residual vs. Institutional Welfare: Narrow and Broad Definitions of Social Welfare Law in Korea, Wilensky & Lebeaux and Gilbert & Specht explain the wider social security system and the residual vs. institutional debate behind it. Wage rules that shape workers' contributions are covered in minimum wage and overtime law.
| United States | Korea | |
|---|---|---|
| Contribution | 12.4% total (6.2% each) | 9% rising to 13% (split half and half for employees) |
| Minimum coverage | 40 credits (~10 years) | 10 years of contributions |
| Full benefit age | 67 | 65 by 2033 |
| Need-based add-on | SSI | Basic Pension (bottom 70% of seniors) |
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Criticism and debate
Supporters call Social Security the most effective U.S. anti-poverty program for older people and want to protect benefits by raising taxes on high earners, since wages above the cap aren't taxed. Critics say rising life spans and fewer workers per retiree make the current design unsustainable and favor raising the retirement age or adding private accounts. Others point out that delaying full benefits hurts workers in physically demanding jobs, who often can't keep working into their late 60s. In Korea, younger people worry they'll pay more than they get back, which is why the 2025 reform added a state guarantee of payment to the law. Because most U.S. jobs are at-will, older workers who lose a job before 62 also face a gap with no early-retirement option.
Check your earnings record years before you retire. A missing year of wages on file can shrink your benefit for life if it isn't corrected.
- How many years do you need to work to get Social Security?
- Generally 40 credits, which takes about 10 years of work with covered earnings.
- What is the full retirement age for Social Security?
- 67 for anyone born in 1960 or later; you can claim from 62 with a permanent reduction or delay up to 70 for an increase.
- What is the difference between SSI and SSDI?
- SSDI is earned through work and payroll taxes, while SSI is a need-based program for older, blind or disabled people with very low income and assets.
References and official sources
- Social Security Act, 42 U.S.C. ch. 7. Cornell LII
- Social Security, Wex. Cornell LII
- Mathews v. Eldridge, 424 U.S. 319 (1976). Cornell LII
- Helvering v. Davis, 301 U.S. 619 (1937). Cornell LII
- 국민연금법. 국가법령정보센터