Once you join the US labor force, your employer(s) withholds FICA taxes from your wages. Currently, 6.20% is withheld for Social Security and 1.45% for Medicare, for a total of 7.65%. Your employer(s) must match your contributions. The Social Security portion applies to the first $106,800 you earn in 2009 (indexed to inflation each year) while the Medicare portion applies to all of your income.

If you are a self-employed individual, you must pay your own Social Security taxes and, since you are the employer and employee, you must pay the total (15.3%) using your net profit from self-employment as the basis of the calculation.

Your working career is measured in units known as quarters of coverage. For every calendar quarter that you earn a certain amount ($1,090 in 2009) you are credited one quarter of coverage. Generally, in order to become "fully insured" and to receive benefits at retirement, you must have accumulated 40 quarters of coverage — i.e., ten years in jobs covered by Social Security.

The amount of your Social Security retirement benefits depends on how much you earned in your career. If you earn a low or average salary, your benefit is less than the benefit paid to a higher earner who would have contributed more to his/her Social Security account throughout the years.

Retirement income is only one of the Social Security system's benefits. If you become disabled or die before you reach retirement age, you or your family may be entitled to other benefits, such as disability benefits, hospital insurance benefits and survivors’ benefits.

Social Security Benefits
Year of Birth	Age for Full Benefits
1937 or earlier	65 years
1938	65 years 2 months
1939	65 years 4 months
1940	65 years 6 months
1941	65 years 8 months
1942	65 years 10 months
1943-1954	66 years
1955	66 years 2 months
1956	66 years 4 months
1957	66 years 6 months
1958	66 years 8 months
1959	66 years 10 months
1960 or later	67 years

In 2009, you can retire at age 62 with reduced Social Security benefits (80% of full benefits) and with full benefits at age 66. The retirement age for full benefits will gradually increase to 67 as shown in table on right. Once this change is fully implemented, those who retire early will only receive 70% of full benefits.

Trying to estimate your retirement benefits may be complicated. Your actual earnings record is compared to the national average to arrive at the primary insurance amount or PIA, which is then converted to your actual benefit. All workers age 25 or older should receive an annual statement of credited earnings and projected benefits at normal retirement age. Be sure to check this statement to ensure that you have been credited with the proper amounts.

Tax on Social Security Benefits
	Single	Married/Joint
No tax on benefits	Provisional income under — $25,000	Provisional income under — $32,000
Includible in taxable income is lesser of 1/2 of benefits or 1/2 of income in excess of base amount	Provisional income from $25,000 to $34,000	Provisional income from $32,000 to $44,000
Up to 85% of benefits can be taxable	Provisional income over $34,000	Provisional income over $44,000
Provisional income is modified adjusted gross income plus 1/2 of Social Security benefits.

A portion of your Social Security benefits could be taxable if other sources provide too much income. (see table on right). Keep these income ranges in mind when you plan to take withdrawals from your retirement assets after your Social Security benefits begin. See IRS publications 554 and 915 for further information.

If you are under full retirement age (currently age 66) when you start getting your Social Security payments, $1 in benefits will be deducted for each $2 you earn above the annual limit. For 2009, that limit is $14,160 ($1,180 per month). In the year you attain full retirement age, $1 in benefits will be deducted for each $3 you earn above a different limit, but only counting earnings before the month you reach the full benefit retirement age. For 2009, this other limit is $37,680 ($3,140 per month). Starting with the month you reach full retirement age, you will get your benefits with no limit on your earnings.