The Social Security program plays a vital role in supporting millions of Americans, including retirees, survivors, and people with disabilities.
The program’s funding is managed through two main trust funds: the Old-Age and Survivors Insurance (OASI) Trust Fund and the Disability Insurance (DI) Trust Fund.
These funds ensure that benefits are distributed on time and in full. While they have operated effectively for decades, recent financial forecasts have raised concerns about their future solvency.
The OASI Trust Fund is responsible for providing retirement and survivor benefits, while the DI Trust Fund focuses on payments for those with disabilities.
Both funds are overseen by the U.S. Department of the Treasury, which manages the revenue collected from payroll taxes. When revenue exceeds benefit payments, the surplus is stored as reserves.
However, if the cost of benefits surpasses incoming revenue, the reserves are used to cover the difference. This system has been sustainable for many years, but new financial projections suggest that significant challenges lie ahead.
OASI faces depletion in 2033
According to the 2024 Trustees Report, the OASI Trust Fund is projected to exhaust its reserves by 2033. After this point, the program will only be able to pay about 77 percent of scheduled benefits using ongoing payroll taxes.
This shortfall could lead to a 23 percent reduction in payments for retirees and survivors if no legislative action is taken. Millions of Americans could see their monthly payments cut, placing additional financial strain on retirees who rely heavily on Social Security as a primary source of income. This looming deadline has become a central issue in discussions about the future of Social Security.
On the other hand, the outlook for the Disability Insurance (DI) Trust Fund is significantly better. The same Trustees Report indicates that the DI Trust Fund is expected to remain solvent for at least the next 75 years. This stability provides much-needed reassurance for individuals relying on disability benefits.