As a long-standing nation of immigrants, the United States is the preferred destination for many. This is not only due to its robust economic foundation, but also because its comprehensive social welfare system is frequently praised. However, before moving to the U.S. or upon arrival, many may not be fully familiar with the American welfare system.
To ensure you can better utilize the various benefits available in the U.S., it is necessary for new immigrants or prospective immigrants to understand the American welfare system. There are many welfare benefits available to U.S. immigrants, with Social Security benefits being the most important.
Social Security Benefits
Social Security benefits represent the universal pension system in the United States. It is the most basic pension that citizens receive from the government; individuals pay payroll taxes while working and receive Social Security benefits upon retirement.
In the United States, anyone who is employed and earns at least $1,160 per month can earn credits. Once they reach 40 credits, they are eligible to receive monthly Social Security benefits upon retirement. For retirees, Social Security is a source of retirement income, especially for low- and middle-income families, for whom it accounts for a significant portion of their post-retirement income.
Functions as Life Insurance
The design of the U.S. Social Security program is intended not only to ensure a basic income for workers after retirement but also to provide coverage for daily living expenses in the event of a work-related injury that prevents further employment. As of June 2012, approximately 56 million people in the U.S. were receiving Social Security benefits, meaning one in every six Americans was a beneficiary.
Covers Almost All Working Professionals
U.S. Social Security benefits are funded by payroll taxes paid by employees during their working years. Therefore, anyone who has worked full-time for more than 10 years is eligible to receive Social Security benefits upon retirement.
Subject to Maximum Benefit Limits
The amount of Social Security benefits Americans receive after retirement is primarily based on their employment income, and benefits are calculated as a proportion of those earnings. Higher-income individuals generally receive higher Social Security benefits upon retirement. To ensure fairness, the U.S. government sets a maximum monthly limit on Social Security benefits while working to maximize the payout for eligible earners.
Primary Source of Income for Retirees
Americans have diverse sources of income after retirement; however, for most U.S. retirees, government-issued Social Security benefits are their primary pension. Among all retirees, approximately 35% rely on Social Security for more than 90% of their retirement income. Furthermore, about 22% of all retirees rely on Social Security as their sole source of income.
Benefits for Children
If a retiree passes away, their children may also be eligible to receive survivor benefits. Furthermore, if the retiree was supporting their parents, the parents may also be eligible to receive survivor benefits from the deceased's Social Security account. The exact monthly amount depends on specific circumstances and regulations.
Benefiting Women
Most American women earn lower wages than men, and many serve as full-time homemakers; therefore, Social Security is particularly important for them. If a retiree passes away, their surviving spouse—if they have no income—may be eligible to receive the deceased spouse's Social Security benefits under certain conditions. Currently, approximately 5 million widowed individuals in the U.S. receive survivor benefits, which provides significant assistance for the elderly, especially women.