Social Security (United States)

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Budget and debt in the United States of America
Major dimensions Economy Expenditures Federal budget Financial position Military budget Public debt Taxation Unemployment Gov't spending
Programs Medicare Social programs Social Security
Contemporary issues Bowles–Simpson Commission Bush tax cuts Debt ceiling history Deficit reduction Fiscal cliff Healthcare reform Political debates Social Security debate "Starve the beast" Subprime mortgage crisis 2007–2008 financial crisis Debt-ceiling crises 2011 2013 2023 2013 budget sequestration Government shutdowns 1980 1981, 1984, 1986 1990 1995–1996 2013 Jan 2018 2018–2019 Related events 2023 Removal of Kevin McCarthy
Terminology Cumulative deficit + Interest ≈ Debt Balance of payments Inflation Continuing resolution
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In the United States, Social Security is the commonly used term for the federal Old-Age, Survivors, and Disability Insurance (OASDI) program and is administered by the Social Security Administration (SSA).^[1] The Social Security Act was passed in 1935,^[2] and the existing version of the Act, as amended,^[3] encompasses several social welfare and social insurance programs.

The average monthly Social Security benefit for September 2023 was $1,706.^[4] The total cost of the Social Security program for 2022 was $1.244 trillion or about 5.2 percent of U.S. gross domestic product (GDP).^[5]

Social Security is funded primarily through payroll taxes called the Federal Insurance Contributions Act (FICA) or Self Employed Contributions Act (SECA). Wage and salary earnings from covered employment, up to an amount determined by law (see tax rate table), are subject to the Social Security payroll tax. Wage and salary earnings above this amount are not taxed. In 2024, the maximum amount of taxable earnings is $168,600.^[6]

Social Security is nearly universal, with 94 percent of individuals in paid employment in the United States working in covered employment.^[7] However, about 6.6 million state and local government workers in the United States, or 28 percent of all state and local workers, are not covered by Social Security but rather pension plans operated at the state or local level.

Social Security payroll taxes are collected by the federal Internal Revenue Service (IRS) and are formally entrusted to the Federal Old-Age and Survivors Insurance (OASI) Trust Fund and the federal Disability Insurance (DI) Trust Fund, the two Social Security Trust Funds.^[8][9] Social Security revenues exceeded expenditures between 1983 and 2009^[10] which increased trust fund balances. The retirement of the large baby-boom generation however, is lowering balances. Without legislative changes, trust fund reserves are projected to be depleted in 2033 for the OASI fund.^[11] Should depletion occur, incoming payroll tax and other revenue would be sufficient to pay 77 percent of OASI benefits starting in 2035.

With few exceptions, all legal residents working in the United States have an individual Social Security Number.