Social Security: What you need to know and how long it will last
Social Security has been given a brief respite as a recent trustees report signaled the fund wouldn’t run out until 2035, a year later than had been predicted. But for the millions of people dependent on the monthly payments and counting on them as they look ahead to retirement, empty coffers will mean smaller, or even no, checks in their twilight years.
Payments for Social Security made up almost a quarter of the federal government’s budget, at $1.4 trillion, in 2023. To understand better what is taking up so many resources and causing so many political headaches for policymakers and politicians in Washington, here are the basics of what to know about the incredibly popular and expensive entitlement program.
What is Social Security?
Social Security is a government program first implemented in 1935 with the goal of providing older people, among others, a safety net of funds. President Franklin Delano Roosevelt described it as a safeguard “against the hazards and vicissitudes of life.”
The originally modest program was designed to help states provide care and assistance for retired workers. The Social Security Act was a two-pronged effort to send federal aid to states to provide cash pensions for workers, as well as create a federal benefits program for retired workers.
In the earliest days of the program, beneficiaries collected anywhere between $10 and $85 a month, equivalent to between $229.66 and $1,952.08 in 2024.
Social Security also covers Supplemental Security Income, which offers financial assistance to “people with disabilities and older adults who have little or no income or resources.”
When I can start collecting Social Security?
Citizens can begin collecting Social Security as young as 62, though there are benefits to waiting to retire because the monthly cash payment will increase.
There have been some discussions about raising the retirement age to decrease the pressure on the entitlement system, keeping more workers in the pool paying into Social Security for longer and extending its life while other solutions are considered.
How much can I receive from Social Security?
Social Security payments vary depending on when one decides to retire. The longer someone works and forgoes beginning to collect payments, the larger his or her eventual payments will be.
Workers must be at least 62 when they retire to begin collecting payments.
For those eligible to collect payments who decide to retire in 2024, their monthly check will range from $2,710 if they retire at the minimum age of 62 to $4,873 if they retire at 70. Workers who retire after 70 will not receive any extra benefit.
It’s most typically used as a retirement program that seniors can take from starting at age 62, though Social Security also covers those who are disabled and survivors of eligible workers.
What do I have to do to enroll in Social Security?
When someone decides to retire and begin collecting payments, he or she needs to inform the Social Security Administration and complete an application.
Applications can be filled out online, by calling the toll-free number 1-800-772-1213, or making an appointment at a local Social Security office.
How is Social Security paid for?
Concerns about funding the expensive Social Security program have been growing as older people retire and begin collecting payments. The program costs the government more than $1 trillion annually, and that number is projected to increase as the number of people 65 and older looks to increase 47% by 2050.
The program is paid for by payroll taxes, which may pop up on a pay stub as Federal Insurance Contributions Act taxes. The taxes also help determine what a person’s Social Security payout at retirement will be.
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Social Security’s trust fund is expected to be depleted by 2035 as lawmakers grapple with how to address the looming problem without cutting the benefits. Cutting benefits could be a controversial solution, as could raising Social Security taxes or a combination of both.
The popular program appears to be a steadfast part of the average American’s benefits in the future, but with an aging America, rulemakers will have to find solutions to keep Social Security running.
