{ "id": "epeq0ftzam", "slug": "social-security", "title": "Social Security", "updated": "2026-10-15", "topic_path": [ { "id": "society", "label": "Society and history", "api_url": "https://www.edgepedia.org/api/v1/topics/society" }, { "id": "society.economy", "label": "Economics and business", "api_url": "https://www.edgepedia.org/api/v1/topics/society.economy" }, { "id": "society.economy.economics", "label": "Economics", "api_url": "https://www.edgepedia.org/api/v1/topics/society.economy.economics" }, { "id": "society.economy.economics.econ_policy", "label": "Economic policy and stability", "api_url": "https://www.edgepedia.org/api/v1/topics/society.economy.economics.econ_policy" }, { "id": "society.economy.economics.econ_policy_fiscal", "label": "Fiscal policy and public economics", "api_url": "https://www.edgepedia.org/api/v1/topics/society.economy.economics.econ_policy_fiscal" }, { "id": "society.economy.economics.econ_policy_fiscal.social_security_transfers", "label": "Social insurance and transfer economics", "api_url": "https://www.edgepedia.org/api/v1/topics/society.economy.economics.econ_policy_fiscal.social_security_transfers" } ], "geo": [ { "id": "geo.us.t1800.society.economy.economics.econ_policy", "label": "United States · 1800 to 1945: Economic policy and stability", "api_url": "https://www.edgepedia.org/api/v1/geo/geo.us.t1800.society.economy.economics.econ_policy", "path": [ { "id": "geo.us", "label": "United States", "api_url": "https://www.edgepedia.org/api/v1/geo/geo.us" }, { "id": "geo.us.t1800", "label": "United States · 1800 to 1945", "api_url": "https://www.edgepedia.org/api/v1/geo/geo.us.t1800" }, { "id": "geo.us.t1800.society", "label": "Society and history", "api_url": "https://www.edgepedia.org/api/v1/geo/geo.us.t1800.society" }, { "id": "geo.us.t1800.society.economy", "label": "Economics and business", "api_url": "https://www.edgepedia.org/api/v1/geo/geo.us.t1800.society.economy" }, { "id": "geo.us.t1800.society.economy.economics", "label": "Economics", "api_url": "https://www.edgepedia.org/api/v1/geo/geo.us.t1800.society.economy.economics" }, { "id": "geo.us.t1800.society.economy.economics.econ_policy", "label": "Economic policy and stability", "api_url": "https://www.edgepedia.org/api/v1/geo/geo.us.t1800.society.economy.economics.econ_policy" } ] }, { "id": "geo.us.t1946.society.economy.economics.econ_policy", "label": "United States · 1946 to 2000: Economic policy and stability", "api_url": "https://www.edgepedia.org/api/v1/geo/geo.us.t1946.society.economy.economics.econ_policy", "path": [ { "id": "geo.us", "label": "United States", "api_url": "https://www.edgepedia.org/api/v1/geo/geo.us" }, { "id": "geo.us.t1946", "label": "United States · 1946 to 2000", "api_url": "https://www.edgepedia.org/api/v1/geo/geo.us.t1946" }, { "id": "geo.us.t1946.society", "label": "Society and history", "api_url": "https://www.edgepedia.org/api/v1/geo/geo.us.t1946.society" }, { "id": "geo.us.t1946.society.economy", "label": "Economics and business", "api_url": "https://www.edgepedia.org/api/v1/geo/geo.us.t1946.society.economy" }, { "id": "geo.us.t1946.society.economy.economics", "label": "Economics", "api_url": "https://www.edgepedia.org/api/v1/geo/geo.us.t1946.society.economy.economics" }, { "id": "geo.us.t1946.society.economy.economics.econ_policy", "label": "Economic policy and stability", "api_url": "https://www.edgepedia.org/api/v1/geo/geo.us.t1946.society.economy.economics.econ_policy" } ] } ], "excerpt": "Social Security, formally Old-Age, Survivors, and Disability Insurance (OASDI), is the United States federal program paying monthly benefits to about 70 million retired and disabled workers.", "snippet": "Social Security, formally Old-Age, Survivors, and Disability Insurance (OASDI), is the United States federal program paying monthly benefits to about 70 million retired and disabled workers.", "node": "society.economy.economics.econ_policy_fiscal.social_security_transfers", "markdown": "# Social Security\n\nSocial Security in the United States is a federal social insurance program, formally Old-Age, Survivors, and [Disability Insurance](https://www.edgepedia.org/disability-insurance) (OASDI), that pays monthly benefits to retired and disabled workers and to their dependents and survivors, financed by a dedicated payroll tax.[1](https://www.everycrsreport.com/files/2025-07-22_R42035_b3288ddcee942e9e0bd485c9e0de2e6cb6e5a4d3.html) In November 2025 it paid benefits to about 70.4 million people at an average of $1,869 per month.[2](https://www.congress.gov/crs-product/R46658)\n\n| Key fact | Detail |\n|---|---|\n| Payroll tax (2025) | Employees and employers each pay 6.2% for Social Security (5.30% OASI, 0.90% DI) plus 1.45% for Medicare, a combined 7.65% each; the self-employed pay 15.30% total; earnings above $176,100 are exempt from the Social Security portion[3](https://www.ssa.gov/oact/TRSUM/2025/index.html) • [4](https://www.ssa.gov/policy/docs/chartbooks/fast_facts/2025/fast_facts25.html) |\n| Benefit formula | PIA = 90% of the first $1,226 of AIME, plus 32% of AIME from $1,226 to $7,391, plus 15% above $7,391 (2025 bend points)[4](https://www.ssa.gov/policy/docs/chartbooks/fast_facts/2025/fast_facts25.html) |\n| Claiming rules | For a worker with an FRA of 66, claiming at 62 pays 75% of PIA; waiting to 70 pays 132%, with delayed credits of 8% per year[2](https://www.congress.gov/crs-product/R46658) |\n| Scale | 70.4 million beneficiaries in November 2025, average monthly benefit $1,869; maximum at FRA in 2025 is $4,018[2](https://www.congress.gov/crs-product/R46658) • [4](https://www.ssa.gov/policy/docs/chartbooks/fast_facts/2025/fast_facts25.html) |\n| Solvency | The 2025 Trustees Report projected OASI reserve depletion in 2033, after which income would cover 77% of scheduled benefits; it projected combined OASDI depletion in 2034, with about 81% payable[3](https://www.ssa.gov/oact/TRSUM/2025/index.html) |\n| Fixing it | Closing the 75-year gap requires either a permanent payroll tax increase of 3.65 percentage points (12.40% to 16.05%) or an immediate 22.4% benefit cut for all beneficiaries[1](https://www.everycrsreport.com/files/2025-07-22_R42035_b3288ddcee942e9e0bd485c9e0de2e6cb6e5a4d3.html) |\n| Recent change | The 2023 Social Security Fairness Act repealed the WEP and GPO for over 2.8 million people, at a cost of about $196 billion over FY2024–FY2034[5](https://www.congress.gov/crs-product/IF12890) |\n\n## What Social Security is and how it got here\n\nTitle II of the [Social Security Act](https://www.edgepedia.org/social-security-act) of 1935 established a national plan of old-age benefits for workers 65 and older, financed by a payroll tax on wages up to a $3,000 base.[1](https://www.everycrsreport.com/files/2025-07-22_R42035_b3288ddcee942e9e0bd485c9e0de2e6cb6e5a4d3.html) The 1939 Amendments shifted the program's emphasis from the individual worker to the family, extending monthly cash benefits to dependents and survivors of workers and creating the Old-Age and Survivors Insurance (OASI) structure.[1](https://www.everycrsreport.com/files/2025-07-22_R42035_b3288ddcee942e9e0bd485c9e0de2e6cb6e5a4d3.html) The Social Security Amendments of 1983 (P.L. 98-21) raised the full retirement age from 65 to 67, phased in over 22 years from 2000 to 2022.[1](https://www.everycrsreport.com/files/2025-07-22_R42035_b3288ddcee942e9e0bd485c9e0de2e6cb6e5a4d3.html)\n\nCoverage is broad but not universal. SSA's Office of the Chief Actuary estimates about 93% of workers, roughly 185 million people, are covered under OASDI, and an estimated 94% of workers in 2025 hold covered employment or self-employment.[2](https://www.congress.gov/crs-product/R46658) • [1](https://www.everycrsreport.com/files/2025-07-22_R42035_b3288ddcee942e9e0bd485c9e0de2e6cb6e5a4d3.html) A retired-worker benefit generally requires 40 earnings credits, about 10 years of covered work.[1](https://www.everycrsreport.com/files/2025-07-22_R42035_b3288ddcee942e9e0bd485c9e0de2e6cb6e5a4d3.html) Over 96% of the population age 60 and above is receiving or will eventually receive Social Security benefits.[6](https://www.nber.org/system/files/chapters/c14895/c14895.pdf)\n\n## How the money flows: payroll taxes, the wage cap, and the trust funds\n\n**Tax rates.** In 2025, employers and employees each pay 6.2% of covered earnings for Social Security, split 5.30% to OASI and 0.90% to Disability Insurance (DI), and self-employed workers pay the full 12.4% (10.6% OASI, 1.8% DI).[3](https://www.ssa.gov/oact/TRSUM/2025/index.html) Adding Medicare's Hospital Insurance (HI) tax of 1.45% from each side, the combined FICA rate is 7.65% per side, or 15.30% for the self-employed.[4](https://www.ssa.gov/policy/docs/chartbooks/fast_facts/2025/fast_facts25.html) • [7](https://www.nber.org/sites/default/files/2023-06/orrc06-10_0.pdf) Earned income above $200,000 for an individual or $250,000 for a joint return pays an additional 0.90% HI tax, with no Social Security counterpart.[4](https://www.ssa.gov/policy/docs/chartbooks/fast_facts/2025/fast_facts25.html)\n\n**The wage cap.** Payroll taxes apply to earnings up to an annual maximum of $176,100 in 2025; the cap is adjusted automatically each year with average covered earnings.[3](https://www.ssa.gov/oact/TRSUM/2025/index.html) • [7](https://www.nber.org/sites/default/files/2023-06/orrc06-10_0.pdf)\n\n**Trust fund finances.** In 2024 the combined OASDI trust funds collected $1.42 trillion in revenues, of which 91.2% came from payroll tax contributions and General Fund reimbursements, 3.9% from income taxes on benefits, and 4.9% from interest.[4](https://www.ssa.gov/policy/docs/chartbooks/fast_facts/2025/fast_facts25.html) Expenditures were $1.48 trillion, and the funds held $2.72 trillion in assets at the end of 2024.[1](https://www.everycrsreport.com/files/2025-07-22_R42035_b3288ddcee942e9e0bd485c9e0de2e6cb6e5a4d3.html) A 2025 CRS summary puts total income at $1.45 trillion (95.2% from dedicated tax revenues), expenditures at $1.61 trillion, and reserves at $2.56 trillion.[8](https://www.everycrsreport.com/files/2026-06-25_IF10522_2e0881b319a6c734bc6bcc31cb480e81115eda77.pdf) The program has run annual cash-flow deficits since 2010, and total cost exceeded total revenue from 2021 to 2024.[1](https://www.everycrsreport.com/files/2025-07-22_R42035_b3288ddcee942e9e0bd485c9e0de2e6cb6e5a4d3.html)\n\n## The benefit formula: AIME to PIA to the monthly check\n\nThe calculation runs in three steps. First, a worker's lifetime covered earnings are indexed and the highest 35 years are averaged and divided by 420 months to produce the average indexed monthly earnings (AIME).[1](https://www.everycrsreport.com/files/2025-07-22_R42035_b3288ddcee942e9e0bd485c9e0de2e6cb6e5a4d3.html) Second, the primary insurance amount (PIA) applies a progressive three-bracket formula to AIME: 90% of the first $1,226, 32% of AIME from $1,226 through $7,391, and 15% of AIME above $7,391, using 2025 bend points; the bend points rise to $1,286 and $7,749 in 2026.[4](https://www.ssa.gov/policy/docs/chartbooks/fast_facts/2025/fast_facts25.html) • [2](https://www.congress.gov/crs-product/R46658) • [1](https://www.everycrsreport.com/files/2025-07-22_R42035_b3288ddcee942e9e0bd485c9e0de2e6cb6e5a4d3.html) The replacement factors of 90%, 32%, and 15% are fixed by law, which is what makes the formula progressive: lower earners replace a much larger share of their wages than higher earners.[2](https://www.congress.gov/crs-product/R46658) • [1](https://www.everycrsreport.com/files/2025-07-22_R42035_b3288ddcee942e9e0bd485c9e0de2e6cb6e5a4d3.html) Third, the PIA is adjusted for the age at which benefits begin. The maximum PIA for a maximum earner claiming at full retirement age in 2026 is $4,152.[2](https://www.congress.gov/crs-product/R46658)\n\n## Claiming rules: FRA, early reductions, delayed credits, and the earnings test\n\n**Full retirement age (FRA)** is the age at which a worker receives an unreduced PIA; the 1983 Amendments moved it from 65 to 67, phased in from 2000 to 2022.[1](https://www.everycrsreport.com/files/2025-07-22_R42035_b3288ddcee942e9e0bd485c9e0de2e6cb6e5a4d3.html)\n\n**Early claiming** reduces benefits by five-ninths of 1% per month, 6⅔% per year, for the first 36 months before FRA, and five-twelfths of 1% per month, 5% per year, beyond that.[2](https://www.congress.gov/crs-product/R46658) **Delayed claiming** after FRA earns delayed retirement credits of 8% per year for people born in 1943 or later, up to age 70.[2](https://www.congress.gov/crs-product/R46658) With an FRA of 66, claiming at 62 yields 75% of PIA and waiting to 70 yields 132%.[2](https://www.congress.gov/crs-product/R46658)\n\nThe dollar stakes are large. A medium earner born in 1960 who claims at 62, the earliest eligibility age, would receive initial monthly benefits of $1,450, growing to $1,885 at 70 through cost-of-living adjustments; the same earner claiming at 70 would start at $3,338 per month.[2](https://www.congress.gov/crs-product/R46658)\n\n## By the numbers\n\nIn November 2025 there were approximately 70.4 million beneficiaries collecting an average monthly benefit of $1,869; retired workers, 76.1% of beneficiaries, averaged $2,013, and disabled workers, 10.1%, averaged $1,589.[2](https://www.congress.gov/crs-product/R46658) The maximum monthly benefit for a worker retiring at FRA in 2025 is $4,018.[4](https://www.ssa.gov/policy/docs/chartbooks/fast_facts/2025/fast_facts25.html)\n\nA separate program, [Supplemental Security Income](https://www.edgepedia.org/supplemental-security-income) (SSI), is means-tested rather than earned: the 2025 federal benefit rate is $967 per month for an individual and $1,450 for a couple, with resource limits of $2,000 and $3,000, and the average federally administered SSI payment was $697.[4](https://www.ssa.gov/policy/docs/chartbooks/fast_facts/2025/fast_facts25.html)\n\n## Solvency and the 2030s question\n\nThe 2025 Trustees Report projects that the OASI Trust Fund can pay 100% of scheduled benefits until 2033, after which continuing program income covers 77% of scheduled benefits.[3](https://www.ssa.gov/oact/TRSUM/2025/index.html) If the OASI and DI funds are combined, the projected OASDI fund pays full benefits until 2034, one year earlier than the previous year's report, then about 81% of scheduled benefits.[3](https://www.ssa.gov/oact/TRSUM/2025/index.html) • [4](https://www.ssa.gov/policy/docs/chartbooks/fast_facts/2025/fast_facts25.html) The DI Trust Fund alone is projected to pay full benefits through the end of the 75-year projection period in 2099.[3](https://www.ssa.gov/oact/TRSUM/2025/index.html)\n\nSources differ slightly on the payable share. CRS's benefit-calculation report states that in 2034 payable benefits would be about 80% of scheduled benefits, declining gradually to 71% by 2099, while the Trustees summary and CRS primer give 81% in 2034, also declining to 71% by 2099.[2](https://www.congress.gov/crs-product/R46658) • [3](https://www.ssa.gov/oact/TRSUM/2025/index.html) • [1](https://www.everycrsreport.com/files/2025-07-22_R42035_b3288ddcee942e9e0bd485c9e0de2e6cb6e5a4d3.html) The 75-year actuarial deficit equals 3.82% of taxable payroll.[1](https://www.everycrsreport.com/files/2025-07-22_R42035_b3288ddcee942e9e0bd485c9e0de2e6cb6e5a4d3.html)\n\n**Why \"the trust fund is empty\" is misleading.** Depletion means the accumulated reserves are gone, not that the program stops. Payroll taxes and other income keep flowing into the funds, and the 2025 Trustees Report projected that then-current-law receipts would cover 77% to 81% of scheduled benefits after depletion, declining gradually over the following decades.[3](https://www.ssa.gov/oact/TRSUM/2025/index.html) • [2](https://www.congress.gov/crs-product/R46658) • [1](https://www.everycrsreport.com/files/2025-07-22_R42035_b3288ddcee942e9e0bd485c9e0de2e6cb6e5a4d3.html) The depletion date also moves with legislation: a subsequent OCACT memorandum projected OASI depletion in 2032 under the projected effects of P.L. 119-21, versus 2033 in the 2025 Annual Report.[2](https://www.congress.gov/crs-product/R46658)\n\n## Recent developments\n\nThe Social Security Fairness Act of 2023 ended the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO), which had reduced or eliminated benefits for over 2.8 million people who receive a pension based on work not covered by Social Security.[5](https://www.congress.gov/crs-product/IF12890) CBO estimated that eliminating the GPO would raise December 2025 monthly benefits by an average of $700 for affected spousal beneficiaries and $1,190 for affected widow(er) beneficiaries, and that repealing the WEP would raise benefits by $360 on average for affected worker beneficiaries and their dependents.[5](https://www.congress.gov/crs-product/IF12890) The act increases direct spending by about $196 billion over FY2024–FY2034 and advances the combined trust funds' exhaustion date by roughly six months, reducing the share of scheduled benefits payable after exhaustion from 78.3% to 77.7%.[5](https://www.congress.gov/crs-product/IF12890)\n\nThe 2026 cost-of-living adjustment is 2.8%, payable in January 2026 benefits.[2](https://www.congress.gov/crs-product/R46658)\n\n## References\n\n1. [Social Security Primer, CRS Report R42035 (July 2025)](https://www.everycrsreport.com/files/2025-07-22_R42035_b3288ddcee942e9e0bd485c9e0de2e6cb6e5a4d3.html)\n2. [Social Security: Benefit Calculation, CRS Report R46658](https://www.congress.gov/crs-product/R46658)\n3. [2025 Trustees Report Summary, SSA](https://www.ssa.gov/oact/TRSUM/2025/index.html)\n4. [Fast Facts & Figures About Social Security, 2025, SSA](https://www.ssa.gov/policy/docs/chartbooks/fast_facts/2025/fast_facts25.html)\n5. [The Social Security Fairness Act of 2023, CRS IF12890](https://www.congress.gov/crs-product/IF12890)\n6. [Social Security Programs and Retirement around the World, NBER](https://www.nber.org/system/files/chapters/c14895/c14895.pdf)\n7. [The Progressivity of Social Security, NBER](https://www.nber.org/sites/default/files/2023-06/orrc06-10_0.pdf)\n8. [Social Security's Funding Shortfall, CRS IF10522](https://www.everycrsreport.com/files/2026-06-25_IF10522_2e0881b319a6c734bc6bcc31cb480e81115eda77.pdf)\n\n---\n*Topic: Encyclopedia › Society and history › Economics and business › Economics › Economic policy and stability › Fiscal policy and public economics › Social insurance and transfer economics*\n\n*Initially written Sep 17, 2026 · Reviewed: Sep 30, 2026; Oct 10, 2026 · Edited: Oct 10, 2026; Oct 11, 2026; Oct 15, 2026 · Last review: Oct 10, 2026*\n\n*Copyright 2026 EdgeChat AI, a subsidiary of Biostate AI.*\n\nLicense: Edgepedia Community License 1.0, https://www.edgepedia.org/edgepedia/license\n", "same_as": [], "url": "https://www.edgepedia.org/social-security", "markdown_url": "https://www.edgepedia.org/social-security.md", "license": { "name": "Edgepedia Community License 1.0", "url": "https://www.edgepedia.org/edgepedia/license", "summary": "Free with credit, commercial use included. AI training is open to everyone. For other uses, organizations over USD 100M in revenue or 100M monthly users license separately.", "spdx": "LicenseRef-Edgepedia-Community-1.0" }, "credit": "\"Social Security\", Edgepedia (EdgeChat), https://www.edgepedia.org/social-security. Edgepedia Community License 1.0.", "credit_md": "\"[Social Security](https://www.edgepedia.org/social-security)\", Edgepedia (EdgeChat), [https://www.edgepedia.org/social-security](https://www.edgepedia.org/social-security). [Edgepedia Community License 1.0](https://www.edgepedia.org/edgepedia/license).", "credit_html": "\"Social Security\", Edgepedia (EdgeChat), https://www.edgepedia.org/social-security. Edgepedia Community License 1.0.", "speakable": "Social Security, formally Old-Age, Survivors, and Disability Insurance, is the United States federal program paying monthly benefits to about 70 million retired and disabled workers." }