The Social Security Trust Fund

The Social Security Trust Fund is a reserve of money collected from payroll taxes that is used to pay benefits to current retirees, disabled individuals, and survivors. When people work, part of their pay is set aside into this fund. If the incoming payroll taxes exceed expenses, the surplus is invested in special Treasury securities, which help grow the fund. When benefits are paid out and income is lower than expenses, these securities are used to cover the shortfall. The trust fund thus helps ensure Social Security can meet its obligations over time, though it faces long-term financial challenges due to demographic shifts.