Retirement Security Medallion

Retirement Security

More and more people are retiring, and many are living longer in retirement. Health care costs are rising, Social Security is stretched to the limit, and debt—both personal and public—is a threat to financial security. Many Americans may find themselves without adequate savings in retirement.

View our report on The Nation’s Retirement System

With the vast majority of Americans either contributing to or receiving Social Security benefits, the program’s financial future is important to us all. As the population ages and labor force growth slows, Social Security programs are being stretched to the limit. Over the long term, there’s a projected gap between how much Social Security costs and how much money will be available to cover those costs.

Video: How Can We Fix Social Security

An overview of Social Security's financial challenges and options to address them.

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What's the Basic Problem?

Social Security programs are on a fiscally unsustainable path. Put simply, Social Security programs now cost more than the government collects to fund them. The gap between costs and revenue is projected to continue, which will eventually deplete the program’s assets.

Costs as a percentage of the gross domestic product (GDP)—the size of the nation’s economy in terms of the total value of goods and services produced in a year—are projected to increase by about 20 percent through 2035. The annual balance between revenues (excluding interest on program assets) and costs as a percentage of GDP is projected to be negative through 2090.

Social Security’s assets are in two trust funds—one for Disability Insurance (DI) and one for the Old-Age and Survivors Insurance (OASI). Costs began to exceed non-interest revenues for the DI trust fund in 2005 and for the OASI trust fund in 2010. The gap for the DI trust fund reached a peak in 2012, following the 2007 to 2009 recession. The gap for the OASI trust fund is generally projected to continue to grow.

Our infographic has answers to key questions about Social Security’s future.

See the following figure for actual and projected annual costs and revenues for both trust funds, plotted at 5-year intervals.

Old-Age and Survivors Insurance (OASI) and Disability Insurance (DI) Costs Have Exceeded Non-Interest Revenues

Note: This figure presents the past and projected annual non-interest revenue (revenues from payroll taxes, taxation of benefits, and general fund reimbursements) and costs for both programs, expressed as a percentage of taxable payroll, for every fifth year. The difference between the revenue and cost rates is the trust funds’ “balance” for the year. The concepts of revenue and cost rates are important for considering the long-term status of the trust funds

The gap between costs and revenues resulted in an immediate funding problem for the DI trust fund, which was projected to be able to pay benefits in full on a timely basis only until the fourth quarter of 2016.

GAO's Guide to Key Questions about Social Security’s Future

Our Guide, released on October 27, 2015, presents the facts on Social Security's financial challenges, options to address them, and tools to evaluate what they mean for the future. The Bipartisan Budget Act of 2015 subsequently made a number of changes, including moving the projected date of Disability Insurance trust fund depletion to 2022. While the immediate financing problem has been addressed, there are still challenges that will need to be addressed and our guide describes options for dealing with these challenges.

A Preview of Key Questions Discussed in GAO's Guide

What are the root causes of Social Security’s financial challenges? Demographic factors, such as an aging population and slower labor force growth, are straining Social Security programs and contributing to a gap between program costs and revenues.

What options have been proposed for changing old-age and survivor insurance? Experts have proposed options to Congress to change the benefit formula or making other changes that might affect program costs and revenues.

What options have been proposed for changing the disability insurance program? What options exist for restoring the programs solvency, changing eligibility criteria, improving program administration, and expanding opportunities to work?

How should policymakers evaluate proposals to modify Social Security? Social Security is so deeply woven into the fabric of our nation that any proposed change should take into account the program in its entirety. Changes that address solvency will present trade-offs regarding the distribution of benefits, revenues, and program costs, but Social Security's challenges also extend beyond projected solvency.

GAO’s Key Reports on Social Security