Social Security is a lifeline for millions of Americans, but it’s facing some tough challenges. In January, the average retired worker received a monthly check of $1,976. While that may not sound like much, Social Security helped lift 22.7 million people out of poverty in 2022, including 16.5 million seniors aged 65 and older.
Despite how crucial Social Security is, the program’s foundation has been shaky for decades. Many people blame Congress for its struggles, but is that really fair?
The Numbers Behind Social Security’s Struggles
Let’s start with the facts. Social Security has been around since January 1940, when the first retired-worker benefit check was mailed. Every year, the Social Security Board of Trustees releases a report on the program’s financial health, and for the past 40 years, the news hasn’t been great. The Trustees have repeatedly warned that Social Security’s income isn’t keeping up with its expenses.
The 2024 report revealed a long-term funding gap of $23.2 trillion through 2098, a sharp increase from the previous year. If nothing changes, the Old-Age and Survivors Insurance Trust Fund, which pays benefits to retired workers and their families, could run out of reserves by 2033. This wouldn’t mean the program goes bankrupt, but it could result in a 21% cut to monthly benefits.
So, what’s causing these financial troubles?
The Blame Game
A common belief is that Congress has been raiding Social Security’s trust funds to pay for wars and other expenses. On social media, you’ll often see claims that lawmakers have “stolen” money meant for retirees. But this popular opinion doesn’t hold up to scrutiny.
Since the Social Security Act was signed into law by President Franklin D. Roosevelt in 1935, any extra money collected by the program has been invested in special government bonds. These bonds are extremely safe and earn interest, ensuring the funds grow over time. As of December 2024, Social Security’s combined reserves stood at $2.721 trillion, earning an average annual return of 2.557%.
To put it simply, Congress hasn’t stolen anything. The money is accounted for, just like when you put money in a savings account or a certificate of deposit at the bank. The funds aren’t sitting idle; they’re being invested responsibly, as required by law.
The Real Issues
If Congress isn’t to blame, what is? The root of the problem lies in ongoing demographic changes.
First, the retirement of baby boomers has dramatically shifted the balance between workers and beneficiaries. There are fewer workers paying into the system to support a growing number of retirees.
Second, people are living longer than they did when Social Security was first established. The program wasn’t designed to pay benefits for several decades, which is now common for many retirees.
Other factors are more subtle but just as impactful. For example, legal migration into the U.S. has significantly declined, dropping by 58% between 1998 and 2023. Immigrants tend to be younger and spend many years contributing to Social Security through payroll taxes, so this decline has reduced the program’s funding base.
The U.S. birth rate is also at an all-time low. This doesn’t cause immediate problems but will create challenges in the next 10 to 20 years as fewer workers enter the labor force.
Finally, rising income inequality is playing a role. Social Security taxes only the first $176,100 of annual income in 2025, meaning earnings above that amount are exempt. This allows a growing portion of income to escape taxation, reducing funds for the program.
The Path Forward
While lawmakers haven’t “stolen” Social Security funds, they do share some blame for not addressing the program’s challenges sooner. It’s going to take a collective effort to strengthen Social Security for future generations. Whether that means increasing taxes, adjusting benefits, or finding other solutions, the clock is ticking.
Social Security remains a vital safety net, but without meaningful action, its ability to support retirees and their families could be at risk.
