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Social Security: A Case Study

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Social security is an annual pay as you go plan since most of the revenues from social security tax are paid from social security retirees.
Social security is a major retirement program in the US with a cost of $736billion each year which is an equivalent of 12.4% on earning up to a set level of earnings. The employee contributes 6.2% and the other half is take care by the employer. Medicare is the US health care program for people aged 65years and above. It is also a pay as you go program as current health benefits for people age 65 and older funded by current tax revenue from 2.9% Medicare tax on earnings and 3.8% investment surtax on wealthier investors. Half amount if paid by the employer and the other half is applied to all earnings.

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