Ch4 Social Security Part 1 (mon)

Social Security was enacted in the

• 1870's

• 1910's

• 1930's

• 1960's

Social Security was intended to

• cover all of the income necessary for retirement.

• provide retirement income for only those who did not save for themselves.

• provide retirement income for only those without private pensions.

• provide a safety net of retirement income to which recipients would add their savings and pensions.

A pay-as-you-go system

• has current retirees being paid out of the taxes of current workers.

• has a sufficient amount of money on hand currently to pay out all future obligations.

• has current retirees being paid out of the taxes of current workers and has a sufficient amount of money on hand currently to pay out all future obligations.

• always requires a trust fund.

A fully-funded system

• has current retirees being paid out of the taxes of current workers.

• has a sufficient amount of money on hand currently to pay out all future obligations.

• has current retirees being paid out of the taxes of current workers and has a sufficient amount of money on hand currently to pay out all future obligations.

• never needs to run a surplus.

Which of the following types of income are subject to FICA taxes?

• Wages and salaries

• Capital gains

• Interest income

• Inheritance