	Introduction

Social Security is a self-financing program that provides monthly cash benefits to retired or disabled workers and their family members and to the family members of deceased workers. Social Security is financed primarily by payroll taxes paid by covered workers and their employers. The annual limit on taxable earnings is $132,900 in 2019. In addition, Social Security receives interest income from Social Security trust fund investments. In 2018, the combined Social Security trust funds (OASDI) had total receipts of $1,003 billion, total expenditures of $1,000 billion, and accumulated holdings (assets) of more than $2.9 trillion. The types of individuals eligible for benefits were expanded over the years, and benefit levels were increased periodically. Under current law, employers and employees each pay 6.2% of covered wages, up to the taxable wage base, in Social Security payroll taxes. First, certain Social Security beneficiaries must include a portion of Social Security benefits in taxable income for the federal income tax, and the Social Security program receives part of those federal tax revenues. Status of the Social Security Trust Funds

Projections by the Social Security Board of Trustees (the trustees) show that Social Security expenditures will exceed tax revenues each year through the end of the 75-year valuation period (2093). The trustees project that the trust funds will have a positive balance (asset reserves) until 2035, allowing Social Security benefits scheduled under current law to be paid in full and on time until then. Stated a different way, the trustees project that Social Security expenditures will exceed income by at least 20% over the next 75 years. For some advocates of reform, the focus is on restoring long-range solvency to the trust funds. As such, a worker's benefit is based on his or her career-average earnings in covered employment (i.e., earnings up to the annual taxable limit) and a progressive benefit formula that is intended to provide adequate benefit levels for workers with low career-average earnings. This section also covers the basic eligibility requirements for different types of Social Security benefits. Full Retirement Age

Social Security retirement benefits are first payable to retired workers at the age of 62, subject to a permanent reduction for "early retirement." The age at which full (unreduced) retirement benefits are first payable is the FRA. 98-21 ), Congress raised the FRA from 65 to 67. The increase in the FRA will be fully phased in for workers born in 1960 or later (i.e., workers who become eligible for retirement benefits at age 62 in 2022 or later). Computation of a Social Security Retired-Worker Benefit

Among other requirements, a worker generally needs 40 earnings credits (10 years of Social Security-covered employment) to be eligible for a Social Security retired-worker benefit. The number of earnings credits needed varies, depending on the age of the worker when he or she became disabled; however, a minimum of six earnings credits is needed. Benefits for the Worker's Family Members

Although the majority of Social Security beneficiaries are retired or disabled workers, nearly 10.7 million beneficiaries (16.9% of the total) are the dependents and survivors of retired, disabled, or deceased workers. For the family of a worker who attains the age of 62 in 2019, or dies in 2019 before attaining the age of 62, the total amount of benefits payable to the family is limited to
150% of the first $1,184 of the worker's PIA, plus 272% of the worker's PIA over $1,184 and through $1,708, plus 134% of the worker's PIA over $1,708 and through $2,228, plus 175% of the worker's PIA over $2,228. Social Security Beneficiaries

In March 2019, there were approximately 63.3 million Social Security beneficiaries.
Social Security provides monthly cash benefits to retired or disabled workers and their family members, and to the family members of deceased workers. Among the beneficiary population, 83% are retired or disabled workers; family members of retired, disabled, or deceased workers make up the remainder. In March 2019, approximately 63.3 million beneficiaries received a total of $85.3 billion in benefit payments for the month; the average monthly benefit was $1,347.
Workers become eligible for Social Security benefits for themselves and their family members by working in Social Security-covered employment. An estimated 93% of workers in paid employment or self-employment are covered, and their earnings are subject to the Social Security payroll tax. Employers and employees each pay 6.2% of covered earnings, up to an annual limit on taxable earnings ($132,900 in 2019).
Among other requirements, a worker generally needs 40 earnings credits (10 years of covered employment) to be eligible for a Social Security retired-worker benefit. Fewer earnings credits are needed to qualify for a disabled-worker benefit; the number needed varies depending on the age of the worker when he or she became disabled. A worker's initial monthly benefit is based on his or her career-average earnings in covered employment. Social Security retired-worker benefits are first payable at the age of 62, subject to a permanent reduction for early retirement. Full (unreduced) retirement benefits are first payable at the full retirement age (FRA), which is increasing gradually from 65 to 67 under a law enacted by Congress in 1983. The FRA will reach 67 for persons born in 1960 or later (i.e., persons who become eligible for retirement benefits at the age of 62 in 2022 or later).
In addition to payroll taxes, Social Security is financed by federal income taxes that some beneficiaries pay on a portion of their benefits and by interest income that is earned on the Treasury securities held by the Social Security trust funds. In 2018, the Social Security trust funds had receipts totaling $1,003 billion, expenditures totaling $1,000 billion, and accumulated assets (U.S. Treasury securities) totaling $2.9 trillion. The Social Security Board of Trustees (the trustees) notes, "Over the program's 84-year history, it has collected roughly $21.9 trillion and paid out $19.0 trillion, leaving asset reserves of $2.9 trillion at the end of 2018 in its two trust funds." Projections by the trustees show that, based on the program's current financing and benefit structure, benefits scheduled under current law can be paid in full and on time until 2035 (under the intermediate set of assumptions). Projections also show that Social Security expenditures are estimated to exceed income by at least 20% over the next 75 years. Restoring long-range trust fund solvency and other policy objectives (such as increasing benefits for certain beneficiaries) have made Social Security reform an issue of ongoing congressional interest.
This report provides an overview of Social Security financing and benefits under current law. Specifically, the report covers the origins and a brief history of the program; Social Security financing and the status of the trust funds; how Social Security benefits are computed; the types of Social Security benefits available to workers and their family members; the basic eligibility requirements for each type of benefit; the scheduled increase in the Social Security retirement age; and the federal income taxation of Social Security benefits.