This page shows textual changes in the document between the two versions indicated in the dates above. Textual matter removed in the later version is indicated with red strikethrough and textual matter added in the later version is indicated with blue.
Social Security provides monthly cash benefits to retired or disabled workers and their family members, as well as to the family members of deceased workers. It is one of the federal government's largest programs, both in terms of the number of people affected (workers and beneficiaries) and its finances. People of all ages are affected by the program, including about 185 million covered workers and 69.6 million beneficiaries (of whom about 3.8 million are children) in 2025.
In 2024, the program had total income of $1.42 trillion (95.1% from dedicated tax revenues) and total expenditures of $1.48 trillion (99.1% for benefit payments). Currently, the Social Security trust funds hold about $2.72September 2, 2026
(IF10426)
Old-Age, Survivors, and Disability Insurance—commonly referred to as Social Security—is a work-based federal insurance program authorized under Title II of the Social Security Act. It provides monthly cash benefits to workers and their families in the event the worker retires, dies, or experiences a work-limiting disability. Social Security is the federal government's largest benefits program. In 2025, about 186 million covered workers contributed to the program and about 70 million people on average received monthly benefits. In 2025, the program had total income of $1.45 trillion (95.2% from dedicated tax revenues) and total expenditures of $1.61 trillion (99.2% for benefit payments). At the end of 2025, Social Security's dedicated trust funds held about $2.56 trillion in U.S. Treasury securities—asset reserves that are available for future program spending.
On a combined basis, the Social Security trust funds are projected to be unable to pay full benefits scheduled under current law by sometime instarting during 2034. At that point, the asset reserves held by the combined trust funds are projected to be depleted, and the program's continuing tax income is projected to cover 8183% of scheduled benefit payments for the rest of 2034, falling to 72% at the end of the projection period (2099)65% by 2100. These projections are made under the Board of Trustees' intermediate assumptions in the 2025 annual report; the 2025 reportits 2026 Annual Report, which reflects the trustees' understanding of Social Security at the start of 2025.
Social Security, authorized under Title II of the Social Security Act, is a self-financing program, with most of its income derived from dedicated payroll tax contributions (91.23%). The program also receives income from the(1) federal income taxes that some beneficiaries pay on a portion of their benefits (3.9%), interest income on4.0%); (2) interest on the asset reserves held by the Social Security trust funds (4.9%), and a small amount (less than 1%) of other income (8%); and (3) other sources, including reimbursements from the General Fund of the Treasury (less than 1%). ).
Workers who are covered by Social Security (about 9493% of all workers) and their employers must pay Social Security payroll taxes. The payroll tax rate is 12.4%, divided evenly between the worker and the employer (each pays 6.2%). The payroll tax is applied to theapplies to a worker's earnings in covered employment, up to an annual limit (commonly known as the taxable maximum). The taxable maximum is generally adjusted each year based on average wage growth. TheIn 2026, the payroll tax is appliedapplies to earnings up to $176,100 in 2025. A worker's earnings$184,500. Earnings above the taxable maximum are not subject to the Social Security payroll tax, and they are not counted in thea worker's benefit computation.
Among workers who are not covered by Social Security (67% of all workers), the largest groups consist of somecertain state and local government employees who participate in alternative pension plans.
Social Security benefits are payable to retired or disabled workers who meet the minimum insured requirements(and to survivors of deceased workers) who meet minimum requirements to be insured, among other factors. In general, 10 years of covered employmentwork are needed to qualifybe insured for retired-worker benefits. The number of years of coveragecovered work needed to be insured in the event of disability or death varies by age, from 1½ years for the youngest workers to 10 years for olderthe oldest workers. In general, disabled workers must also have worked for 5five of the past 10 years immediately before the onset of disabilitytheir disability began to be disability insured.
|
Key Points on Social Security
|
Benefits are also payable to the eligible family members of retired, disabled, or deceased workers. Eligible family members include spouses, divorced spouses, widow(er)s, dependent children, and dependent parents.Another eligibility factor is age. For example, a worker can claim retired-worker benefits as early as age 62. However, benefits claimed before the full retirement age (FRA) are reduced to take into account the longer expected period of benefit receipt. (The FRA ranges from 65 to 67,Insured workers can begin claiming reduced retired-worker benefits as early as age 62; unreduced benefits upon reaching their full retirement age (FRA), which is age 65 to 67 depending on the worker's year of birth.) Similarly, a worker may delay claiming retired-worker; or increased benefits until after the FRA; in this case, benefits are increased (up to age 70) to take into account the shorter expected period of benefit receipttheir FRA up to age 70. Adjustments for early or delayed retirementclaiming are intended to provide the workerworkers with the same total lifetime benefits (based on average life expectancy) regardless of when they claim. In other words, benefits claimed before FRA are reduced to account for the longer expected period of benefit receipt and benefits claimed after FRA (up to age 70) are increased to account for the shorter expected period of benefit receipt.
How Are Benefits Computed?
Social Security benefits are designed to replace a portion of a worker's earnings from work. A worker's benefit is based on his or her career-average covered earnings with the same total lifetime benefits (based on average life expectancy).
Benefits are also payable to the family members of retired, disabled, or deceased workers. Eligible family members include spouses, divorced spouses, widow(er)s, dependent children, and dependent parents. The benefit amount payable to a family member is based on the type of benefit and the worker's basic benefit amount (before any adjustments are made). For example, spouses receive up to 50% of the worker's basic benefit amount; widow(er)s receive up to 100% of the worker's basic benefit amount. There is an overall limit on the amount of benefits payable on a worker's record. If total benefits payable to the worker and family members exceed the maximum, benefits for each family member (excluding the worker) are reduced on a proportional basis. Other adjustments may be made to the family member's benefit, based on the person's age when claiming benefits, whether the person receives a Social Security benefit or a noncovered pension based on his or her own work record, and other factors.
Social Security benefits are designed to replace part of a worker's earnings from work. As such, the amount of a worker's benefit is based on his or her career-average earnings in covered employment (i.e., earnings up to the taxable maximum) and a progressive benefit formula that is intended to provide adequate benefit levels for workers with low career-average earnings.
The benefit computation process includes severalhas three steps. First, thea worker's covered earnings earnings (up to the taxable maximum) are indexed to average wage growth; indexing, which brings nominal earnings up to near-current wage levels. TheThen, the worker's highest 35 years of indexed earnings are selected and summed; summed and the total is divided by 420 months (35 years x 12 months). The result is to get the worker's Average Indexed Monthly Earnings (AIME). If a worker has fewer than 35 years of earnings in covered employmentcovered earnings, years with no earnings are entered as zeros, resulting in a lower AIME. (In the case of disabled-worker and survivor benefits, fewer than 35 years of earnings may be used in the computation.)
Next Second, the Social Security benefit formula is applied to the worker's AIME. The benefit formula has three parts—with three different formula factors (consists of fixed replacement factors—90%, 32%, and 15%)—that are applied to three respective segments of the worker's AIME. The result is the worker's Primary Insurance Amount (PIA). The PIA is the initial monthly benefit payable to the worker at the full retirement age. It is also used to determine the amount of benefits payable to family members based on the worker's record (i.e., benefits for family members are equal to a specified percentage of the worker's PIA).
The benefit computation process, including the progressive three-part benefit formula, generally results in
Adjustments may be made to the worker's PIA based on a number of factors, including the age at which the worker claims benefits. Unlike many other sources of retirement income, Social Security benefits are adjusted for inflation through annual cost-of-living adjustments.
As of May 2025, there were 69.6 million Social Security beneficiaries. The largest group is retired workers (75.9%), followed by disabled workers (10.3%). Family members of deceased workers make up 8.4% of the total, and family members of retired or disabled workers make up 5.5%.
|
Retired workers |
52.8 million |
|
Spouses of retired workers |
2.0 million |
|
Children of retired workers |
0.7 million |
|
Disabled workers |
7.1 million |
|
Spouses of disabled workers |
0.1 million |
|
Children of disabled workers |
1.0 million |
|
Survivors of deceased workers |
5.9 million |
Benefit amounts vary by individual based on a number of factors, including an individual's earnings history, the age at which he or she claims benefits, and the type of benefit (for example, a retired-worker benefit or a spousal benefit). The following statistics show average monthly benefit amounts by category as of May 2025.
|
Retired workers |
$2,002 |
|
Spouses of retired workers |
$950 |
|
Children of retired workers |
$925 |
|
Disabled workers |
$1,582 |
|
Spouses of disabled workers |
$440 |
|
Children of disabled workers |
$512 |
|
Survivors of deceased workers |
$1,566 |
Third, the worker's PIA may be adjusted based on several factors, including the worker's claiming age. Unlike many other sources of retirement income, Social Security benefits are adjusted for inflation through annual cost-of-living adjustments (COLAs). The benefit amount payable to eligible family members is based on the worker's benefit type and equals a specified percentage of the worker's basic benefit (i.e., PIA). For example, spouses receive up to 50% of the worker's basic benefit amount and widow(er)s receive up to 100% of the worker's basic benefit amount. There is a limit on the amount of benefits payable on a worker's record, called the family maximum. If the total amount of benefits payable to the worker and their family members exceeds the maximum, each family member's benefits (but not the worker's) are reduced proportionally. Family members' benefits may be adjusted based on their claiming ages, whether they receive Social Security based on their own work records, and other factors. In July 2026, there were 71.3 million Social Security beneficiaries, most of whom were retired workers (76.8%), followed by disabled workers (9.8%). Family members of retired, disabled, or deceased workers made up the remainder (13.4%). Retired workers 54.8 million Spouses of retired workers 2.1 million Children of retired workers 0.7 million Disabled workers 7.0 million Spouses of disabled workers 0.1 million Children of disabled workers 0.9 million Survivors of deceased workers 5.8 million Benefit amounts vary by individual based on several factors, including the individual's earnings history, claiming age, and benefit type (e.g., a retired-worker benefit or a spousal benefit). The following statistics show average monthly benefit amounts by beneficiary category in July 2026. Retired workers $2,086 Spouses of retired workers $987 Children of retired workers $960 Disabled workers $1,635 Spouses of disabled workers $464 Children of disabled workers $529 Survivors of deceased workers $1,635 Social Security operates largely on a pay-as-you-go basis, meaning that payroll tax contributions from today's workers and their employers fund monthly benefits to today's beneficiaries. For many years, Social Security collected more in revenues than it needed to pay out in benefits, resulting in accumulated asset reserves held by the trust funds that are available for future program spending. Today, Social Security collects less revenue than it needs to pay benefits and draws upon its asset reserves to make up the difference. For many years, Social Security collected more revenues than needed to pay benefits, resulting in accumulated assets (interest-bearing U.S. Treasury securities) held by the trust funds available for future spending on Social Security. Today, as Social Security collects less revenue than needed to pay benefits, it draws upon those asset reserves to meet its expenditures. The career-average earnings). Who Receives Benefits and How Much Do They Receive?
What Is Social Security's Financial Status?
7256 trillion in asset reserves will be depleted by sometime induring 2034. At the point of reserve depletionthat point, the program's continuing tax income is projected to cover 8183% of benefit payments, falling to 7265% in 20992100. Over a 75-year projection period, on average, Social Security's expendituresscheduled costs are projected to exceed its income by about 24%. Demographic factors, such as lower fertility rates and increasing longevity, contribute in large part to Social Security's projected funding imbalance. Together, they contribute to a decline in theover 20% on average. Social Security's projected funding imbalance is driven largely by demographic factors, such as declines in fertility, increases in longevity, and decreases in net immigration, which are projected to result in a lower number of workers paying into the system relative to the number of beneficiaries. Other contributing factorspeople collecting benefits. Other factors contributing to the projected imbalance include program design features, such as wage indexing in the benefit-computation process.
The program's projected financial outlookshortfall has prompted discussion among policymakers about changes to Social Security, with the policy debate reflecting a variety of objectives and approaches to reform. For example, the Social Security debate reflects efforts to scale back the program in response to Social Security's projected funding shortfalls, growing federal budget deficits, and other concerns. In general, such proposals include a combination of revenue increases and benefit reductions. The Social Security debate also reflects a shift in focus among some policymakers toward proposals that would expand Social Security benefits to address concerns about the adequacy of benefits and, more broadly, retirement income security.
For more information. Lawmakers could choose from a wide range of revenue-increasing and cost-reducing provisions to help eliminate the projected imbalance. Examples of revenue-increasing provisions include increasing the payroll tax rate or eliminating the taxable maximum. Examples of cost-reducing provisions include raising the FRA or reducing annual COLAs. Depending on what provisions, if any, lawmakers choose to include in legislation, changes may affect workers and beneficiaries in different ways. Policy changes implemented sooner rather than later, in addition to requiring revenue-increasing or cost-reducing provisions that are smaller in magnitude, would allow workers and beneficiaries more time to adjust their behavior.
For more information on Social Security, see CRS Report R42035, Social Security Primer.