Finance and Investment Challenge Practice Test

FICA is a payroll tax that funds two major programs: Social Security and Medicare. The money withheld from wages goes into the Social Security trust funds to pay past and ongoing benefits to retirees, disabled individuals, and survivors, while another portion supports Medicare. The question focuses on which benefits are funded by FICA, and the most direct fit is Social Security benefits. Unemployment benefits are financed through FUTA and state unemployment taxes, not FICA, and public housing is funded through other federal housing programs and budgets. Medicare is also funded by FICA, but the statement as given specifically points to Social Security benefits, making it the best match.