Social Security trust funds are accounts managed by the U.S. Treasury. The two funds take in Social Security 澳洲幸运5官方开奖结果体彩网:payroll taxes from workers and their employers and pay out benefits to Social Security🌼 recipients. They invest any surplus in special issue U.S. government debt securities.

What Are the Social Security Trust Funds?

The Social Security trust funds are used by the U.S. government to manage surplus contributions to the Social Security system. They are funded through a 澳洲幸运5官方开奖结果体彩网:withholding tax that deducts a set percentage of pretax income from each paycheck. If 澳洲幸运5官方开奖结果体彩网:contributions made by workers and employers exceed what's needed to fund benefits payments to retired and disabled workers, the funds invest the surplus in U.S. government debt.

How the Social Security Trust Funds Work

Social Security relies on two legally separate trust funds: the Old-Age and Survivors Insurance (OASI) Trust Fund and the 澳洲幸运5官方开奖结果体彩网:Disability Insurance (DI) Tru꧅st Fund. The OASI Trust Fund is used to pay benefits to retired workers and their families, as well as to the families of deceased workers. The DI Trust Fund covers benefits for disabled workers and their families.

The OASI trust fund receives 10.6% of employee earnings covered by Social Security payroll taxes, and the DI trust fund the other 1.8%. Otherwise, the two funds work similarly.

Whenever workers and employers pay more money into the Social Security system than it needs at the same time to pay benefits to the current beneficiaries, those “excess” contributions are invested in special U.S. government securities. That allows the federal government to borrow money from the trust funds for purposes other than Social Security, while the trust funds earn investment income with the lowest possible risk.

What Securities Do the Trust Funds Own?

The Social Security trust funds are limited by law to investing their reserves in U.S. government debt. Although the funds have held marketable securities in the past, they typically and currently own only special U.S. debt issued expressly for use by the trust funds. In contrast to the Treasury securities sold to the public, which are only guaranteed to return 澳洲幸运5官方开奖结果体彩网:face value when redeemed at maturity, the speci🌄al issue debt held by the trust funds may be redeemed at fa🍃ce value at any time if needed to meet current obligations.

The special government securities come in two types: short-term certificates of indebtedness, which mature on the following June 30, and bonds with a term of one to 15 years. The short-term certificates and bonds issued to the Social Security trust funds are not traded in the bond market or available to the public. Like other Treasury securities, however, they are backed by the full faith and credit of the U.S. government.

The interest rate on the special issues is set by a formula established in 1960 through amendments to the 澳洲幸运5官方开奖结果体彩网:Social Security Act. For special issue debt issued to the trust funds in a given month, the interest rate is the average market yield on the last day of the prior month for marketable U.S. government debt securities not due or callable for more than four years, rounded to the nearest one-eighth of a percentage point.

In 2024, the trust funds earned an effective interest rate of 2.5%, while the average of the 12 monthly rates for the debt they purchased that year was 4.3%. In March 2025, the interest rate for new special issue debt bought by the Social Security trust funds was 4.25%.

Current Social Security Finances

The 2024 annual report from the Social Security and Medic🐻are Boards of Trustees updated the financial projections for the Old-Age and S🐠urvivors Insurance (OASI) Trust Fund and the Disability Insurance (DI) Trust Fund.

Combined OASI and the Disability Trust Funds

The OASI and Disability Insurance (DI) trust funds had combined asset reserves of $2.79 trillion at the start of 2024. For both, the trustees projected 2024 Social Security expenditures of $1.48 trillion, exceeding the expected income of $1.38 trillion. The Hospital Insurance (HI) Trust Fund was expected to increase reserves in 2024.

The OASI Trust Fund

The trustees' 2024 report predicted the OASI Trust Fund's reserves will run out in 2033, same as predicted in the previous year's report. Once the fund is depleted, ongoing payroll tax receipts will cover 79% of the scheduled 澳洲幸运5官方开奖结果体彩网:Social Security benefits for retirees, their families, and survivors.

The Disability Insurance (DI) Trust Fund

The DI reserves are now projected to be sufficient over the next 74 years, with the 2024 report stating DI reserves will be able to pay out 100% of benefits through 2098. The DI Fund is legally separate from OASI, so transferring money from it to allow the payment of full retirement benefits before those reserves were also exhausted would require action by Congress.

Demographics and Taxes

For the 75-year projection period, the actuarial deficit is 3.5% of taxable payroll (down from 3.61% the previous year). In other words, Social Security taxes would need to increase by 3.5% to fix the problem for at least 75 years.

The 澳洲幸运5官方开奖结果体彩网:Baby Boomer generation, whose older members have begun collecting Social Security benefits, is much larger than the cohorts of the youngest workers replacing it in the workforce. With the U.S. population growing older on average and fewer workers left to support each retiree than previously, Social Security's long-term financial prospects are unlikely to improve meaningfully without reform no matter how well the economy is performing.

The Future of the Social Security Trust Fund

Social Security is a pay-as-you-go system, with tax receipts pooled and immediately available to pay benefits to retired workers and others. For many years, the payroll tax income funding Social Security was more than sufficient to cover the benefits being paid out. Over time, the two Social Security trust funds accumulated combined reserves that peaked at $2.9 trillion at the start of 2020.

However, the program's benefits payouts exceeded tax receipts in 2021, and deficits are expected to widen in the coming years as the ranks of beneficiaries grow faster than the workforce supporting them. The OASI Trust Fund's $2.6 trillion in reserves at the end of 2023 is expected to run out in 2033 unless Congress acts to shore up the system's funding.

The Bottom Line

The two Social Security Trust Funds—the Old-Age and Survivors Insurance (OASI) Trust Fund and the Disability Insurance (DI) Trust Fund—are managed by the U.S. Department of the Treasury. The accounts are funded through payroll taxes on working individuals, and the money is invested in U.S. securities. At the start of 2024, the funds had approximately $2.79 trillion in assets with the expectation that the trust funds combined would not have enough money to pay out ful☂l benefits by 2035.