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1 1 (May 10, 2024)

handle is hein.crs/govepvg0001 and id is 1 raw text is: Social Security Overview Social Security provides monthly cash benefits to retired or disabled 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 all ages are affected by the program, including 182 million covered workers and 67.5 million beneficiaries (of whom 3.8 million are children) in 2024. In 2023, the program had total income of $1.35 trillion (95.1% from dedicated tax revenues) and total expenditures of $1.39 trillion (99.1% for benefit payments). Currently, the Social Security trust funds hold about $2.79 trillion in U.S. Treasury securities-asset reserves that are available for future program spending. On a combined basis, the Social Security trust funds are projected to be unable to pay full benefits scheduled under current law beginning in 2035. At that point, the asset reserves held by the combined trust funds are projected to be depleted, and the program's continuing tax income is projected to cover 83% of scheduled benefit payments in 2035, falling to 73% at the end of the projection period (2098). These projections are made under the Board of Trustees' intermediate assumptions in the 2024 annual report; the 2024 report reflects the trustees' understanding of Social Security at the start of 2024. How s Socal Security Financed? Social Security, authorized under Title II of the Social Security Act, is a self-financing program with most of its income derived from dedicated payroll tax contributions (91.3%). The program also receives income from the federal income taxes that some beneficiaries pay on a portion of their benefits (3.8%), interest income on asset reserves held by the Social Security trust funds (5.0%), and a small amount (less than 1%) of other income (including reimbursements from the General Fund of the Treasury). Workers who are covered by Social Security (about 94% of all workers in 2024) and their employers must pay Social Security payroll taxes. The payroll tax rate is 12.4%, divided evenly between the worker and the employer (each pays 6.2%). The payroll tax is applied to the worker's earnings in covered employment, up to an annual limit (the taxable maximum). The taxable maximum is generally adjusted each year based on average wage growth. The payroll tax is applied to earnings up to $168,600 in 2024. A worker's earnings above the taxable maximum are not subject to the Social Security payroll tax, 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 local government employees who participate in alternative pension plans. Updated May 10, 2024 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 of coverage to be insured in the event of disability or death varies by age, from 1½2 years for the youngest workers to 10 years for older workers. In general, disabled workers must have worked for 5 of the past 10 years immediately before the onset of disability. Key Points on Social Security A 182 million covered workers (and their employers) pay into the system. 0 67.5 million beneficiaries receive monthly cash benefits, including retired workers, disaabled workers, spouses, children, bend wirow(er)s. 0 It is a self-financing program, with ibout 95. of its totait income from dedicated tlax revenues. p Over its 89-year history, the progrtam hs collected $27.75 trillion aind pa,id out $24.96 trillion, lea,ving trust fund aisset reserves of about $2.79 trillion. 0 On ai combined lbazsis, the Sociail Security trust funds ar-e projected to be unable to py full benefits stfrting in 2035, iargely due to oekograEphic falctors. Another eligibility factor is age. For example, a worker can claim retired-worker benefits as early as age 62. However, benefits claimed before the full retirement age (FRA) are reduced to take into account the longer expected period of benefit receipt. (The FRA ranges from 65 to 67, depending on the worker's year of birth.) 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 expected period ofbenefit receipt. Adjustments for early or delayed retirement are intended to provide the worker with the same total lifetime benefits (based on average life expectancy). Benefits are also payable to the family members ofretired, disabled, 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 overall limit on the amount of benefits payable on a worker's record. If total benefits payable to the worker and family members exceed the maximum, benefits for each family member (excluding the worker) are reduced on a proportional basis. Other adjustments may be made to the family member's benefit, based on the person's age when

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