A review from Social Security trustees has given the program until 2034, one year earlier than anticipated, until it runs out of money. For the millions of people dependent on the monthly payments and counting on them as they look ahead to retirement, empty coffers will mean smaller, or even no, checks in their twilight years.

Payments for Social Security made up over 20% of the federal government’s budget, at $1.5 trillion, in 2024. To understand what is taking up so many resources and causing so many political headaches for policymakers and politicians in Washington, here are the basics of what to know about the incredibly popular and expensive entitlement program.

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What is Social Security?

Social Security is a government program first implemented in 1935 to provide older people with a safety net of funds. President Franklin Delano Roosevelt described it as a safeguard “against the hazards and vicissitudes of life.”

The initial program was designed to help states provide care and assistance for retired workers. The Social Security Act was a two-pronged effort to send federal aid to states to provide cash pensions for workers and create a federal benefits program for retired workers.

In the program’s earliest days, beneficiaries collected between $10 and $85 a month, equivalent to between $229.66 and $1,952.08 in 2024.

Social Security also covers Supplemental Security Income, which offers financial assistance to “people with disabilities and older adults who have little or no income or resources.”

When can I start collecting Social Security?

Citizens can begin collecting Social Security as young as 62, although there are benefits to waiting to retire because the monthly cash payment will increase.

Some discussions include raising the retirement age to decrease the pressure on the entitlement system, keeping more workers in the pool paying into Social Security for longer, and extending its life, while other solutions are considered.

How much can I receive from Social Security?

Social Security payments vary depending on when one decides to retire. The longer someone works and forgoes beginning to collect payments, the larger his or her eventual payments will be.

Workers must be at least 62 when they retire to begin collecting payments.

For those eligible to collect payments and decide to retire in 2025, their monthly check will range from $2,831 if they retire at the minimum age of 62 to $5,108 if they retire at 70. Workers who retire after 70 will not receive any extra benefits.

Social Security typically acts as a retirement program for seniors beginning at age 62. The program offers coverage eligibility for the disabled and survivors of eligible workers.

What do I have to do to enroll in Social Security?

When someone decides to retire and begin collecting payments, he or she needs to inform the Social Security Administration and complete an application.

Applications can be filled out online, by calling the toll-free number 1-800-772-1213, or by making an appointment at a local Social Security office.

How is Social Security paid for?

Concerns about funding the Social Security program have been growing as older people retire and begin collecting payments. The program costs the government more than $1 trillion annually, and this number is projected to increase as the number of people 65 and older is expected to increase by 47% by 2050. 

The program is paid for by payroll taxes, which may appear on a pay stub as Federal Insurance Contributions Act taxes. The taxes also help determine a person’s Social Security payout at retirement.

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Social Security’s trust fund is expected to be depleted by 2034 as lawmakers grapple with addressing the looming problem without cutting benefits. Cutting benefits, raising Social Security taxes, or a combination of both could be controversial.

The popular program is a steadfast part of the average American’s future benefits. Still, with an aging America, rulemakers will have to find solutions to keep Social Security running.