Social Security is largely a pay-as-you-go program. Most of the payroll taxes collected from today’s workers are used to pay benefits to today’s recipients. In 2017, the Old-Age and Survivors Insurance and Disability Insurance Trust Funds collected $996.6 billion in revenues. Of that amount, 87.7% was from payroll tax contributions and reimbursements from the General Fund of the Treasury and 3.8% was from income taxes on Social Security benefits. Interest earned on the government bonds held by the trust funds provided the remaining 8.5% of income. Assets increased in 2017 because total income exceeded expenditures for benefit payments and administrative expenses.
Sources and uses of Social Security revenues in 2017:
Sources: 2018 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Disability Insurance Trust Funds, Table II.B1.
https://www.ssa.gov/policy/docs/chartbooks/fast_facts/2018/fast_facts18.html#pagei
