Social Security - signed into law in 1935 as the Old-Age, Survivors, and Disability Insurance program - provides cash benefits to retirees and those unable to work due to disability. It is funded by payroll taxes that are collected from workers and their employers and deposited into interest-earning accounts called trust funds. Since the early 1980s, the income collected by the funds has been greater than the benefits paid to people, so the funds have been able to save money for future years.
Social Security costs began to exceed income in 2018
In 2018, costs for the retirement portion of Social Security exceeded income for the first time since the financial reforms of the 1980s. The retirement trust fund had to use savings to pay for the difference. However, since costs for disability insurance were still less than income, the two Social Security trust funds combined took in more money than paid out in benefits.
