What Happens When a Social Security Trust Fund Runs Out?
When a Social Security trust fund runs out of reserves, it loses the ability to draw on past surpluses to help pay today’s benefits. Dedicated tax revenue continues to come in. If that income falls short of the benefits scheduled under current law, it can cover only part of the cost unless Congress changes the law. Understanding what runs out starts with separating the money the program takes in over a period from the reserves it has built up over time. Social Security has two legally separate funds. The Old-Age and Survivors Insurance Trust Fund and the Disability Insurance Trust Fund pay different benefits. The first covers retired workers and eligible family members, including survivors of workers who have died. The second covers eligible workers with disabilities and their families. A projection for the two funds together offers a view of the whole program, while the balance of each fund matters for the benefits that fund can pay. Moving money between the funds would take a chan...
