Q: My monthly Social Security check has money withheld for Medicare. I have a temp job to keep busy, and that paycheck has FICA withheld. Is this double taxation? — Jane Walker, Aurora
A: No. FICA stands for the Federal Insurance Contributions Act, which was the result of FDR’s Social Security Act of 1935. It mandates that employers withhold a percentage of a person’s paycheck — currently 6.2 percent — for Social Security benefits as well as an additional 1.45 percent for Medicare. The first retirement benefits were paid in 1937.
Your retirement check is paying into Medicare, likely for the Medicare Part B premium or its prescription-drug plan.
Your side job, however, isn’t the same, and you must pay into FICA just as if you were not retired, according to Mike Baksa at the Denver regional office of the Social Security Administration.
“It doesn’t matter if you are drawing a benefit. If you are working in a covered position, then FICA must be contributed,” Baksa said.
As you know, today’s Social Security retirees are supported by today’s wage earners who pay into the system, who will be supported in their retirement by the wage earners of that day, and so on. So, in essence, you’re helping support your own retirement.
However, the SSA on Tuesday said the financial system that millions rely on in their retirement years, unless fixed, will operate in a deficit — more money going out than is coming in to support it — by 2017, and will be “exhausted” — government-speak for “broke” — by 2041.
David Migoya wants to get the answers to your consumer questions. E-mail consumertips@ denverpost.com or write to Consumer Shopping Bag, The Denver Post, 101 W. Colfax Ave., Suite 600, Denver, CO, 80202.
