Social Security’s revenue and expenditures by year show a program that has been running an annual shortfall since around 2021: it collected about $1.42 trillion in calendar year 2024 and spent roughly $1.48 trillion, a $67 billion gap that is drawing down the trust fund reserves.1Social Security Administration. Trust Fund Financial Operations in 2024 Those reserves stood at about $2.72 trillion at the end of 2024, and the combined funds are projected to be depleted in 2034.2Social Security Administration. Summary of the 2025 Annual Social Security and Medicare Trust Fund Reports
Yearly Totals for Recent Fiscal Years
The 2025 trustees report tracks combined OASI and DI trust fund income and costs on a fiscal-year basis (October through September):3Social Security Administration. Fiscal Year Historical and Projected Trust Fund Operations Through 2034
- FY 2021: $1,080 billion in income, $1,135 billion in costs, a deficit of roughly $55 billion.
- FY 2022: $1,203 billion in income, $1,219 billion in costs, a deficit of about $16 billion.
- FY 2023: $1,333 billion in income, $1,355 billion in costs, as the large 2023 COLA took effect.
- FY 2024: $1,404 billion in income, $1,461 billion in costs, widening the annual deficit to roughly $57 billion.
Calendar year 2024 tells the same story on a slightly different clock: $1,417.8 billion in, $1,484.8 billion out, a net loss of $67 billion in reserves.1Social Security Administration. Trust Fund Financial Operations in 2024
Why the Gap Keeps Widening
Revenue is not falling. It keeps rising in dollar terms, pushed up by wage growth and a larger workforce. Costs simply grow faster, and two forces explain most of the difference.
The first is demographics. Roughly 10,000 baby boomers per day have been reaching retirement age, and the beneficiary count has climbed from about 59 million a decade ago to over 70 million by the end of 2025.4Social Security Administration. Social Security Beneficiary Statistics Longer life expectancy means each retiree collects for more years. The worker-to-beneficiary ratio has fallen to about 2.6 covered workers per beneficiary, down from over 3 a generation ago.5Social Security Administration. Covered Workers and Beneficiaries
The second is the annual cost-of-living adjustment. The 2026 COLA is 2.8%, bringing the average monthly retirement benefit to about $2,071.6Social Security Administration. 2026 Cost-of-Living Adjustment Fact Sheet In high-inflation years the effect is larger and permanent: the 8.7% COLA applied in 2023 added tens of billions to annual spending that then compounds forward.
Where the Revenue Comes From
Three streams feed the trust funds. Payroll taxes do the heavy lifting: employees pay 6.2% of wages, employers match with 6.2%, and self-employed workers pay the full 12.4% themselves.7Office of the Law Revision Counsel. 26 USC 3101 – Rate of Tax8Office of the Law Revision Counsel. 26 USC 1401 – Rate of Tax The tax only applies up to an annual earnings cap; for 2026, that cap is $184,500.9Social Security Administration. Contribution and Benefit Base
Federal income tax on the Social Security benefits of higher-income retirees is credited back to the trust funds, and because the income thresholds that trigger that tax have not been adjusted for inflation since the 1980s and 1990s, a growing share of beneficiaries owes it each year.10Office of the Law Revision Counsel. 26 USC 86 – Social Security and Tier 1 Railroad Retirement Benefits
The third source is interest on trust fund reserves, which are invested in special-issue Treasury securities backed by the full faith and credit of the United States.11Office of the Law Revision Counsel. 42 USC 401 – Trust Funds As the reserve balance shrinks, interest income shrinks with it, which speeds the drawdown.
Where the Money Goes
Almost all outlays are benefit payments. The program runs two trust funds. Old-Age and Survivors Insurance (OASI) pays retired workers, spouses, and survivors of deceased workers, and it accounts for roughly 90% of spending. OASI reserves were about $2.54 trillion at the end of 2024, but that balance is declining each year.2Social Security Administration. Summary of the 2025 Annual Social Security and Medicare Trust Fund Reports
Disability Insurance (DI) pays workers who can no longer earn a living because of a severe, long-term medical condition. DI reserves were about $183 billion at the end of 2024, and the 2025 trustees report projects the fund will remain fully solvent through at least 2099.2Social Security Administration. Summary of the 2025 Annual Social Security and Medicare Trust Fund Reports
Administrative costs are small. The Social Security Administration’s operating expenses, including staff, offices, and technology, have consumed 1% or less of total annual spending every year since 1989, for a program that paid over 70 million people by the end of 2025.12Social Security Administration. Social Security Administrative Expenses4Social Security Administration. Social Security Beneficiary Statistics
Reserves and the 2034 Depletion Date
The $2.72 trillion in combined reserves at the end of 2024 sounds large, but it represents less than two years of benefit payments at current spending, and it falls by tens of billions each year. Those reserves are not cash. They are special-issue Treasury bonds, and when annual costs exceed income the trust funds redeem some of the bonds, with Treasury paying them off from general revenue.11Office of the Law Revision Counsel. 42 USC 401 – Trust Funds
Under current law, the combined OASI and DI trust funds are projected to be depleted in 2034.2Social Security Administration. Summary of the 2025 Annual Social Security and Medicare Trust Fund Reports The retirement fund on its own faces a slightly earlier depletion date of 2033.
What a Depleted Trust Fund Would Mean
Depletion does not mean Social Security stops. Payroll taxes keep flowing in. At the combined depletion point, ongoing revenue would still cover about 81% of scheduled benefits, and that share is projected to gradually decline to roughly 72% by 2099.13Congress.gov. Social Security – Selected Findings of the 2025 Annual Report If the retirement fund runs dry before Congress acts, the law does not authorize borrowing to close the gap. Benefits would be limited to what incoming revenue can cover, which translates to an automatic cut of around 23% for retirees.14Social Security Administration. 2025 Annual Report of the Board of Trustees
That is the practical stake behind the yearly numbers. Revenue keeps growing. Costs grow faster. The reserves cushion the difference for now, and the year-by-year deficits are the countdown.