00:00The federal government spent $1.5 trillion on Social Security in fiscal year 2024,
00:05accounting for 22.4% of the total federal budget. This vital program provides financial support to
00:12nearly 69 million Americans, including retirees, people with disabilities, and survivors.
00:19In December 2024 alone, $104.7 billion was distributed to retirees,
00:24with an average monthly benefit of $1,975.
00:30Disabled workers received an average of $1,581, and survivors, $1,546.
00:38Social Security is funded through payroll taxes paid by U.S. workers and their employers.
00:44In 2024, workers contributed an estimated $1.3 trillion to the trust funds,
00:50which held a combined $2.7 trillion at the end of the year.
00:54However, the system is facing a critical challenge.
00:57The Social Security trust funds have been running a deficit since 2021, depleting by a record $67 billion in 2024.
01:06The Social Security Administration projects that these funds could be depleted by 2034 without congressional intervention.
01:14This means that if no action is taken, benefits for over 60 million retirees and their families could face an automatic 23% cut.
01:21More people are reaching retirement age, fewer are entering the workforce, and people are living longer.
01:33The ratio of dependent age people to working age people has risen by 13% since 2007.
01:39The baby boomer generation, born between 1946 and 1964, is a significant factor.
01:46As this large cohort ages, the proportion of Americans 65 and older is projected to grow by 26% over the next 12 years, reaching about 77 million by 2035.
01:58This means more beneficiaries and proportionally fewer workers contributing to the system.
02:04Compounding this, the death rate has been decreasing, extending life expectancy.
02:10In 2022, 65-year-olds were expected to live 19 more years, compared to 14 years in 1959.
02:18Congress faces tough choices.
02:19Some proposals include taxing higher-income earners, who currently don't pay Social Security taxes on income above $176,100 annually.
02:35The last Social Security payment for June 2025 will be made on Wednesday, June 25, for those who started receiving benefits after May 1997 and have a birthday between the 21st and 31st of any month.
02:47The future of Social Security hinges on swift and decisive action from Congress to ensure this essential program continues to support millions of Americans.
02:57Money Explainers
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