By: Virginia P. Reno and Anita Cardwell

Published: May, 2006

Social Security Brief No. 21 ~ May 2006

Summary: In January 2006, 48.5 million people, or about one in every six U.S. residents, received Social Security benefits. The benefits are financed by dedicated taxes on earnings paid by workers and employers and by income taxes upper income beneficiaries pay on part of their Social Security benefits. According to the 2006 trustees report, the Social Security trust funds will have an annual surplus of $177 billion in 2006. Annual surpluses are projected to continue for the next 10 years and reserves are projected to grow to $4,186 billion by 2015. Beginning in 2017, tax revenues flowing into the trust funds will be less than total expenditures. In 2040, the reserves are projected to be depleted. At that time, tax income coming into the trust funds will cover about 74 percent of benefits and administrative costs at that time, according to the 2006 report of the Social Security trustees.

A brief summarizing the findings in the Medicare report, Medicare Finances: Findings of the 2006 Trustees Report is also available.

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