Facts about Social Security- why the trust is being depleted

Nobody stole or misused the Social Security taxes (trust fund) money, nobody‼️

Here is the current status

The following is text from the last Social Security Trustee Report.

Based on the Trustees’ intermediate assumptions, Social Security’s cost exceeds total income in 2025, as it has since 2021, and remains higher than income throughout the remainder of the 75-year projection period.

The OASI Trust Fund is projected to have sufficient reserves to pay full benefits on time until 2033. The DI Trust Fund is projected to have sufficient reserves to pay full benefits throughout the 75-year projection period ending in 2099. Legislative action will be needed to prevent OASI reserve depletion.

In the absence of such legislation, continuing income to the trust funds at the time of reserve depletion would be sufficient to pay 77 percent of OASI benefits.

Social Security’s combined trust funds are projected to cover full payment of scheduled benefits on a timely basis until the trust fund reserves become depleted in 2034.

Full payment of benefits until the hypothetical combined reserves are depleted in 2034 implicitly assumes that the law will have been changed to permit the transfer of funds between OASI and DI as needed. At the time of reserve depletion, projected continuing income to the combined trust funds equals about 81 percent of the program cost.

By 2099, continuing income equals about 72 percent of the program cost.

The actuarial deficit for the combined trust funds under the intermediate assumptions is 3.82 percent of taxable payroll for the 75-year period 2025-99

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In 2025 the median weekly earnings were $1,204. That means a 1.91% increase in payroll taxes would average $23, less for half of workers. That’s a small price to pay for better long-term financial security. The impact could be less if a bit more of the increase was on employers, say 1.5% and 2.32.

The best way to think of these taxes is as an insurance premium. It buys protection for disability, retirement income, survivor and family benefits.

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Here is why the trust reserves are being depleted and why incoming revenue is insufficient to pay full benefits.

Primary Reasons for Depletion

1. Demographic Shifts (Aging Population and Baby Boomers):
The biggest driver is the large wave of baby boomers retiring. In 1960, there were over 5 workers paying taxes per beneficiary; today it’s about 2.7 workers per beneficiary, projected to drop below 2.5. More retirees are drawing benefits while fewer workers support the system.

2. Eroding Taxable Payroll Base Due to Wage Inequality:
Payroll taxes (12.4% split between employee/employer) apply only up to a cap adjusted annually. As income growth has concentrated at the top, a smaller share of total earnings is taxed—down from ~90% in 1983 to ~83% today. High earners’ wages above the cap escape taxation, reducing revenue growth (but they also are not counted for benefit liability.

3. Recent Policy Changes Increasing Costs:
Laws like the Social Security Fairness Act (2025) expanded benefits for certain public sector workers (e.g., teachers, police), accelerating depletion. Reducing the portion of SS benefits subject to income tax also reduces trust income.

4. Economic Factors and Legacy Effects:
The Great Recession reduced payroll tax revenue and accelerated some retirements. Slower fertility rates and labor force growth also play roles. The 1983 reforms anticipated some aging but not the full extent of inequality and economic shocks.

Social Security is largely a pay-as-you-go system: Current workers’ taxes mostly fund current beneficiaries. The trust funds were built up as a buffer during years when there were more workers, but that buffer is now being spent down.