retirement

5 little-known facts about Social Security

Retirement » 5 Little-Known Facts About Social Security

Where do payroll deductions for Social Security go?
Where do payroll deductions for Social Security go?

In theory, they're held in trust by the government. But it's not as if your money sits there in the Social Security trust fund waiting for you to retire. After current beneficiaries are paid, surplus dollars are used to buy bonds from the U.S. Treasury. So the trust has the bonds, but the money is now in the Treasury, where Congress can use it for any purpose.

"The Social Security trust fund is ... a piggybank holding paper IOUs from Congress," Stumpf says.

Unfortunately, Social Security's total cost has exceeded noninterest income from its combined trust funds since 2010, and the 2013 Trustees Report estimates that this shortfall will continue for the next 75 years. The report estimates that trust fund assets will allow for full payment of scheduled benefits through 2032.

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