By:Virginia P. Reno, Elizabeth Lamme, and Elisa A. Walker
Published: May, 2011
Social Security Brief No. 36 ~ May 2011
Summary: In January 2011, 54.2 million people, or about one in six U.S. residents, received Social Security benefits. The benefits are financed by mandatory contributions paid by workers and employers, by income taxes that beneficiaries pay on part of their Social Security benefits, and by interest earned on accumulated trust fund reserves. The 2011 Trustees Report finds that Social Security had an annual surplus – revenue plus interest income in excess of program outgo – of $69 billion in 2010. Annual surpluses are projected to continue for the next 12 years (2011-2022) and reserves are projected to grow to $3.7 trillion by the end of 2022. Beginning in 2023, if Congress takes no action in the meantime, reserves will start to be drawn down to pay benefits. In the very unlikely event that Congress does not act before 2036, the reserves would be depleted and revenue coming into the funds then would cover about 77 percent of scheduled benefits and administrative costs. Social Security is strong in the near term, and relatively modest changes can bring it into long-term balance over the next 50 and 75 years.