What Is the Social Security Trust Fund?

The Social Security Trust Fund refers to two accounts used by the U.S. government to manage surplus contributions to the Social Security system. It is used when contributions made by workers and employers exceed the amount currently needed to fund the system to make scheduled benefits payments to retired workers and the disabled. The monies held within the fund are invested in interest-bearing federal securities (Treasury bonds) to increase the value of the fund.

Key Takeaways

  • The Social Security Trust Fund receives payroll taxes and pays out benefits to participants.
  • It invests any surplus in low-risk government securities that earn interest and are backed by the full faith and credit of the U.S. government.
  • The trust fund is expected to stop running a surplus in 2021, at which time it will need to gradually draw down its reserves to pay benefits.
  • The 2021 Social Security Trustees Report shows that retirement/survivor and disability funds will run out in 2034.

How the Social Security Trust Fund Works

The two funds that make up the Social Security Trust Fund are the Old-Age and Survivors Insurance (OASI) Trust Fund—which pays retirement and survivor benefits—and the Disability Insurance (DI) Trust Fund—which pays disability benefits. They are often thought of as one fund and referred to as “the trust fund.” The Social Security Trust Fund was created to account for an anticipated future shortfall in benefits needed to pay retirees via Social Security benefits payments.

Following an increase in the Social Security payroll tax in the 1980s, the excess contributions from the tax increase were deposited into the Social Security Trust Fund to be used at a future date when the current assets of the Social Security system are no longer sufficient to cover their obligation. The asset reserves of the combined trust funds amounted to almost $2.9 trillion as of June 2021. For more information, the Social Security Administration (SSA) provides a FAQ guide covering the trust funds.


The year in which the Social Security Trust Fund is projected to run out of money.

Special Considerations

Under current projections, the combined Social Security Trust Funds will run a deficit (where annual costs will exceed income) for 2021. With the assets currently in the funds, interest, and the value of redeemable Treasury bonds, full benefits will be payable until 2033, at which point the combined funds will run out. After that, Social Security will be able to continue to pay 76% of scheduled benefits from annual tax income.

Several ideas have been considered to address the coming shortfall, such as raising the retirement age, increasing taxes, cutting spending and benefits, and borrowing more.

Sometimes funds in the trust fund are used for purposes other than providing Social Security benefits. Such a practice creates a federal budgetary obligation (as part of the national debt or intra-governmental debt) to the Social Security Administration, which Congress can choose to avoid paying back by enacting legislation.