7. Social Security: the OASI and DI trust funds¶
Short answer: Social Security is paid almost entirely from its own payroll tax. The retirement fund (OASI) is projected to run out of reserves in late 2032; the disability fund (DI) is not projected to run out within 75 years. Since 2021 the program's total cost has exceeded its total income, so its reserves are being drawn down (OASDI TR 2026, PDF p. 11).
| Calendar year 2025, $ billions | OASI | DI | OASDI (combined) |
|---|---|---|---|
| Payroll taxes | 1,130.7 | 191.9 | 1,322.6 (91.3%) |
| Income tax on benefits | 56.4 | 1.4 | 57.8 (4.0%) |
| Interest | 61.7 | 7.2 | 68.9 (4.8%) |
| Total income | 1,248.8 | 200.5 | 1,449.3 |
| Total cost | 1,448.8 | 160.7 | 1,609.5 |
| Net change in reserves | -200.0 | +39.8 | -160.2 |
| Reserves, end of 2024 | 2,538.3 | 183.2 | 2,721.5 |
| Reserves, end of 2025 | 2,338.3 | 223.0 | 2,561.3 |
Table 7. Source: 2026 OASDI Trustees Report, Table II.B1 (PDF p. 16) and PDF pp. 17, 58. Combined cost was $1,596.5 billion of benefits, $7.0 billion of administrative expenses and $6.0 billion of financial interchange with the Railroad Retirement program; benefits were 99.2 percent of cost (PDF pp. 16-17).
Next year. The Trustees project 2026 income of $1,493.2 billion against cost of $1,696.8 billion, a reserve decline of $203.6 billion, leaving $2,357.7 billion at the end of 2026 (PDF p. 58). Combined reserves peaked at $2,908.3 billion at the end of 2020 and have fallen every year since (PDF p. 184). Cost has exceeded non-interest income every year since 2010 (PDF p. 11).
The tax¶
| OASI | DI | Total | |
|---|---|---|---|
| Employee | 5.3% | 0.9% | 6.2% |
| Employer | 5.3% | 0.9% | 6.2% |
| Combined | 10.6% | 1.8% | 12.4% |
Table 8. Rates from 2019 on, on wages up to the taxable maximum, which is $184,500 in 2026 (up from $176,100). Source: SSA Office of the Chief Actuary, "Social Security & Medicare Tax Rates" and "Contribution and Benefit Base" pages; SSA 2026 COLA fact sheet.
The total rate has not changed since 1990 (OASDI TR 2026, PDF p. 69). What has changed is the split between the two funds. Congress has moved part of the OASI rate to DI twice: in 1994 (to 5.26 and 0.94 percent each for 1994-96, from 5.6 and 0.6) and under the Bipartisan Budget Act of 2015 (P.L. 114-74), which set 5.015 and 1.185 percent each for 2016-2018 before the rates returned to 5.3 and 0.9 in 2019 (SSA tax-rate page). Income tax on up to 50 percent of benefits goes to OASI and DI; the tax on the part between 50 and 85 percent goes to Medicare's HI fund (PDF pp. 17, 175).
When the reserves run out¶
| OASI | DI | OASDI (hypothetical combined fund) | |
|---|---|---|---|
| Reserves depleted | 4th quarter of 2032 | Not within 75 years | 3rd quarter of 2034 (unchanged from 2025 report) |
| Share of scheduled benefits payable then | 78% | 100% | 83% |
| Share payable in 2100 | 62% | 100% | 65% |
| Short-range and long-range adequacy tests | Fails both | Passes both | Fails both |
Table 9. Source: 2026 OASDI Trustees Report, PDF p. 12.
"Although the two funds are separate by law, their operations and reserves are often shown on a combined basis and referred to as OASDI" (PDF p. 9). The combined figures show what would happen if Congress again reallocated between the funds, as it did in 1994 and 2015; they are a hypothetical, not the current law. Once reserves are gone, scheduled benefits "could not be paid in full on a timely basis" (PDF p. 53); the program "could pay out in benefits only what it receives in revenues" (CRS IF13256, p. 1). The Treasury's Financial Report states the reason: "Because the program lacks the authority to borrow to continue paying benefits, benefit payments would be limited to the available noninterest income" (Financial Report FY2025, PDF p. 182).
The cash point made for Medicare Part A applies here too (Section 6): the 2025 shortfall of $160.2 billion was paid by redeeming Treasury securities, which the Treasury funds from its general receipts or borrowing.
The long-range outlook got worse¶
The 75-year actuarial deficit is 4.42 percent of taxable payroll, about 1.5 percent of GDP, up from 3.82 percent in the 2025 report (PDF p. 13). In present value the 75-year unfunded obligation is $29.3 trillion, up from $25.1 trillion (PDF p. 14).
| Reason for the change since the 2025 report | Effect on the actuarial balance (% of taxable payroll) |
|---|---|
| Valuation period moved one year (now 2026-2100) | -0.07 |
| Legislation, chiefly the One Big Beautiful Bill Act (enacted July 4, 2025), through lower income tax on benefits | -0.16 |
| Demographic data and assumptions | -0.44 |
| ... of which: ultimate fertility rate lowered from 1.90 to 1.75 children per woman | -0.33 |
| ... of which: ultimate temporary or unlawfully present immigrant entrants lowered from 1.35 to 1.20 million a year | -0.12 |
| ... of which: fewer 2022-25 immigrant entrants; more 2025-30 emigration | -0.04; -0.05 |
| Economic data and assumptions | +0.10 |
| Disability data and assumptions | +0.02 |
| Methods and programmatic data | -0.05 |
| Total | -0.60 |
Table 10. Source: 2026 OASDI Trustees Report, PDF pp. 91-95. The demographic sub-items are the larger ones the report lists and do not sum exactly to the subtotal.
What closing the gap would take (PDF p. 14):
| Starting January 2026 | Starting at depletion in 2034 | |
|---|---|---|
| Payroll tax increase | 12.40% → 16.65% (+4.25 points) | 12.40% → 17.30% (+4.90 points) |
| Cut to all scheduled benefits | 25.2% | 28.5% |
| Cut to benefits of the newly eligible only | 30.3% |
Size of the program. Social Security paid benefits to 70 million people in December 2025 (PDF p. 11). The Trustees Report says the program will cover 185 million workers and 71 million beneficiaries in 2026 (PDF p. 15); CRS gives "approximately 186 million" workers (IF13256, p. 1). Beneficiaries received a 2.8 percent cost-of-living adjustment for 2026 (SSA COLA fact sheet).