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1 1 (September 3, 2021)

handle is hein.crs/govegxj0001 and id is 1 raw text is: Updated September 3,2021 Social Security Overview Social Security provides monthly cash benefits to retired or dis abled 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 allages are affectedby theprogram, including 176 million covered workers and about 65 million beneficiaries (ofwhom3.9 million are children) in 2021. In 2020, the programhad totalincome of $1,118.1 billion (93.2% fromdedicatedtaxrevenues) and total expenditures of $1,107.2 billion (99.0% forbenefit payments). Currently, the Social Security trust funds hold about $2.9 trillion in U.S. Treasury securities-asset reserves that are available for future programspending. Over the long term, however, Social Security is projected to be unable to pay fullbenefits scheduledundercurrentlaw beginning in 2034. At that point, the asset reserves heldby the trust funds are projected tobe depleted, andthe program's taxincome is projected to cover aboutthree-fourths ofscheduled benefit payments throughtheend ofthe projectionperiod (2095). These projections are made under the Board of Trustees' intermediate assumptions in the 2021 annualreport; the 2021 report reflects thetrustees' understanding of Social Security at the start of 2021. H-ow ks Social Security Financed? Social Security, authorized under Title II of the Social Security Act, is a self-financing programwith most ofits income derived fromdedicatedp ayroll tax contributions (89.6%). The programalso receives income fromthe federal income taxes that some beneficiaries pay on a portion of theirbenefits (3.6%), interest income on asset reserves held by the Social Security trustfunds (6.8%), and a small amount (less than 1%) ofotherincome (including reimbursements fromthe General Fund of the Treasury). Workers who are coveredby Social Security (94% of all workers in 2021) and their employers mustpay Social Security payroll taxes. The payroll taxrate is 12.4%, divided evenly between the worker and the employer (each pays 6.2%). The payrolltaxis applied to the worker's earnings in covered employment, up to an annuallimit (the taxable maximum). The taxable maximum is adjusted each year based on average wage growth. The payrolltaxis applied to earnings up to $142,800 in 2021. A worker's earnings abovethe taxable maximum are not subject to the Social Security payrolltax, and they are not counted in the worker's benefit computation. Among workers who are not covered by Social Security (6% of all workers), the largest groups consist of some state and localgovernmentemployees who participate in alternative pensionplans and federalemployees hired before 1984 who are covered by the Civil Service Retirement System(CSRS). W hoQualifiesforBenefits? Social Security benefits are payable to retired or disabled workers who meet the minimum insured requirements, among other factors. In general, 10 years of covered employment are needed to qualify for retired-worker benefits. The number of years ofcoverage to be insuredin the event of disability or death varies by age, fromll/ years for the youngest workers to 10 years for older workers. In general, disabled workers must have worked for 5 of the past 10years immediately before theonset ofdisability. Key Points on Social Security * 1 76 million covered workers (and their employers) pay into the system. * Over 65 million beneficiaries receive monthly cash benefits, including retired workers, disabled workers, spouses, children, and widow(er)s. * It is a self-financing program, with 93.2% of its total income from dedicated tax revenues. . Over its 86-yearhistory, the program has collected $24.1 trillion and paid out $21.2 trillion, leaving trust fund asset reserves of about $2.9 trillion. * It is projected to be unable to pay full benefits starting in 2034,largely dueto demographic factors. Another eligibility factor is age. For example, a worker can claim retired-worker benefits as early as age 62. However, benefits claimed before the fullretirement age (FRA) are reduced to takeinto account the longer expected period of benefit receipt. (The FRA ranges from65 to 67, depending on the worker's year ofbirth.) Similarly, a worker may delay claiming retired-worker benefits until after the FRA; in this case, benefits are increased(up to age 70) to take into account the shorter expectedperiod ofbenefit receipt. Adjustments for early or delayed retirement are intended to provide the worker with the s ame total lifetime benefits (based on average life expectancy). Benefits are also payable to the family members ofretired, dis abled, 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 overalllimit on the amount of benefits payable on aworker's record. Iftotalbenefits payable to the worker and family members exceed the maximum, benefits for each family member (excluding the worker) are reduced on a proportionalbasis. Other adjustments may be made to the family member's benefit, basedon theperson's agewhen claiming benefits, whether thepersonreceives a Social at

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