What are the Social Security Trust Funds?

Core Points - The article provides a primer on the Social Security trust funds, explaining their roles and importance in ensuring the payment of benefits to eligible recipients [1][4]. Group 1: Trust Funds Overview - There are two trust funds associated with Social Security benefits: the Old-Age and Survivors Insurance Trust Fund (OASI) and the Disability Insurance (DI) Trust Fund [3][8]. - The purpose of these trust funds is to ensure sufficient funds are available to pay benefits to retired workers, disabled workers, and survivors of deceased workers [4]. Group 2: Financing and Investment - The trust funds are primarily financed through Social Security payroll taxes collected under the Federal Insurance Contributions Act (FICA), with contributions split between employees and employers [5]. - When the Social Security Administration (SSA) collects more in payroll taxes than it pays out in benefits, the surplus is invested in special U.S. Treasury securities, which earn interest and help the funds grow [6][7]. Group 3: Current Concerns - Social Security operates on a "pay as you go" basis, meaning current payroll taxes fund current benefits. For over 30 years, the SSA collected more than it paid out, resulting in a surplus that reached $2.9 trillion [9].