In U.S. personal finance, the federal program that provides retirement benefits mainly funded by payroll taxes is Social Security.
The Social Security program was created by the Social Security Act of 1935 during President Franklin D. Roosevelt’s administration. Its retirement system is financed primarily through payroll taxes collected under the Federal Insurance Contributions Act, with current revenue and trust-fund financing supporting benefits under the program’s rules.
Eligibility for retirement benefits is connected to a worker’s earnings record and accumulation of work credits. The amount also depends on factors including lifetime earnings and the age at which benefits begin. Social Security includes other benefits, such as disability and survivors benefits, so it is broader than a retirement-only account.
Social Security is not the same as Medicare. Medicare is federal health insurance primarily associated with older adults and certain disabled people, while Social Security is principally an income-benefit program. Private pensions and personal retirement accounts are separate from Social Security.