Social Security
Old-Age, Survivors, and Disability Insurance (OASDI)
Quick Facts
Total Annual Budget
$1.6 Trillion
Beneficiaries
67 Million
Your Tax Rate
6.2%
of wages up to $168,600
Avg Monthly Benefit
$1,907
How Social Security is Funded
Social Security is funded through dedicated payroll taxes, not general income taxes. Both you and your employer contribute:
- Employee contribution: 6.2% of wages
- Employer contribution: 6.2% of wages
- Self-employed: 12.4% of net earnings
- 2024 wage cap: $168,600 (no SS tax on income above this)
Note: Social Security operates as a "pay-as-you-go" system. Current workers' contributions pay current retirees' benefits. Excess funds go to the Social Security Trust Fund.
What Social Security Funds
Retirement Benefits (77%)
Monthly payments to retired workers and their families. Workers become eligible at age 62, with full benefits between ages 66-67 depending on birth year.
Disability Benefits (13%)
Monthly payments to disabled workers and their families. Covers workers who become disabled before reaching retirement age and can no longer work.
Survivor Benefits (10%)
Monthly payments to families of deceased workers, including widows/widowers, children, and dependent parents.
Trust Fund Status
According to the 2024 Trustees Report:
- Trust fund reserves: $2.79 trillion at end of 2023
- Projected to pay full benefits through 2033
- After 2033, incoming taxes would cover 80% of scheduled benefits
- Small adjustments now could extend solvency significantly