AARP (Source: Getty Images (2)) Facebook Twitter LinkedIn Question 1 of 10 The money to pay Social Security benefits mostly comes from: Income taxes Unemployment taxes Payroll taxes Investment returns About 94 percent of U.S. workers pay into the Social Security system via FICA withholding from their wages or taxes on self-employment income. Those payroll taxes accounted for 91 percent of Social Security Administration (SSA) revenue in 2024. Question 2 of 10 True or false: Not all wages are subject to Social Security taxes. True False In 2025, Social Security collects payroll taxes on up to $176,100 of a worker’s gross earnings or profit from self-employment. Work income above that level is not taxed to fund Social Security. Question 3 of 10 True or false: Congress decides how much Social Security spends on benefits each year. True False Social Security has a dedicated funding source and its spending on benefits is not subject to congressional review. Congress does decide how much the SSA can annually spend on operations and customer service. Question 4 of 10 When Social Security collects more in taxes in a year than it pays out in benefits, the surplus goes into: The U.S. Treasury Dedicated trust funds that are invested in Treasury bonds Refunds for workers Investments in stocks Social Security maintains two trust funds, one for retirement and survivor benefits and one for disability benefits. Question 5 of 10 When Social Security pays out more in benefits than it collects in taxes, it currently: Issues bonds to cover the difference Reduces benefits Borrows from other government programs Draws on the trust funds The combined trust funds had about $2.7 trillion in reserves at the end of 2024. However, with the ranks of retirees swelling in recent years, benefit payments have outstripped revenues, forcing the SSA to dip into those reserves to pay scheduled benefits in full. Members only Unlock Access to AARP Members Edition Join AARP to Continue Already a Member? Login
Question 6 of 10 Social Security’s trustees issue an annual report that assesses the program’s long-term fiscal health. According to the 2025 report, the combined trust funds will run short of reserve funds in: 2031 2034 2042 2050 The forecast has been fairly consistent for the past several years, projecting a shortfall sometime between 2033 and 2035. Question 7 of 10 True or false: If the trust funds run dry, Social Security will go away. True False A shortfall does not mean Social Security would be broke. Benefits will keep going out as long as payroll tax revenue keeps coming in. However, those taxes would not be enough to pay 100 percent of the benefits owed. Question 8 of 10 Based on 2025 projections, how much will benefits be reduced if the trust funds run short? 10 percent 12 percent 19 percent 25 percent Absent government action to strengthen Social Security’s finances, the SSA says it would be able to pay out 81 percent of scheduled benefits when the trust funds are depleted in 2034. Question 9 of 10 Averting a shortfall and maintaining full benefit payments requires: Congressional action A presidential order A federal commission All of the above The way Social Security collects revenue and distributes benefits can only be amended through legislation. The president or an appointed commission can propose changes, but Congress would still have to enact them. Question 10 of 10 The last time the trust funds nearly ran short, in the early 1980s, Congress passed a broad set of changes designed to shore up Social Security’s finances, among them: Raising the retirement age Taxing a portion of Social Security benefits Speeding up a scheduled payroll tax rate hike All of the above Passed with bipartisan support, the Social Security Amendments of 1983 extended the program’s solvency for decades. Policymakers today are similarly debating how to best restore Social Security’s fiscal health — by reducing benefits, increasing revenues or combining both approaches. Submit Quiz You have unanswered questions. Please go back and complete those questions to finish the quiz. 0 Correct 0 Incorrect Oops...something went wrong. Please log out and log back in to continue.
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