The Pour Over Today - Is Social Security Actually Going Broke?

Episode Date: August 29, 2026

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Itamae Fuller, the first recipient of Social Security, a Social Security check in January of 1940. Okay, I feel like I've heard that name. I know I've heard that name in like a textbook. Until now. She lived to be 100 and she paid in like $25 into Social Security and received almost $23,000 in benefits because she lived to be 100. Mom. That's a really good ROI. Hey, it's Kathleen.

And this is Catherine Ann. Welcome to TPO Explains, where we provide news context for normal people, or normal-ish, if you're anything like us. On Monday, Wednesday, and Friday, we hear at The Poor Over summarize the day's biggest headlines for you. But as we are writing about multiple topics, there's always something that we wish we knew more about. So on Saturdays, we pick one of those topics. We go on a shallow. dive into that topic or if it's like today's topic, it felt like a medium dive. I had a lot to learn. We went a little deep. We did, but we take you along with us. So K.A. writes our explainers,

and today she's going to read through what we've got for you on Social Security. So feel free to follow along with your eyes or just your ears. Yeah. I feel like this one prompted a lot of questions after our last week's explainer on the national debt when we talked a little bit about social security and then a lot of people had questions and then we were like, hey, we've got questions too. We have questions too. So start with what even is social security? It's a monthly paycheck distributed by the government, mostly for retirees. The idea behind the Great Depression era social insurance program is that you pay in while working to collect when you stop working.

So for most people, that's retirement, but money paid to the Social Security Administration, or the SSA, also covers disabled workers and spouses and children of deceased workers. Hence the two SSA trust funds, which are the old age and survivor insurance and disability insurance, or the OASI and the DI, wouldn't be the government with a ton of acronyms. I know. So where does the money come from? Your paycheck and your employer. If you work in the U.S., 6.2% of your paycheck is automatically set aside for Social Security. It might read as FICA on your stub. And your employer chips in another 6.2% up to a certain point.

There is a $184,500 wage gap, so earnings over that aren't taxed for Social Security for the rest of the year. That was wild to me. I think my first, my first reaction was like, oh, well, we should raise it. Like, why aren't people making more than that also paying Social Security, which, I don't know, people probably have that reaction. I don't know. Did you think that was crazy? Well, yeah, I think it's immediately like, oh, my gosh, you make more money, you get to escape the benefits. But I was like, okay, why?

And I looked into it. And it's because Social Security is like a pay. pay it. You're supposed to get out of it what you put into it. So there's a cap on both ends of how much you can earn from Social Security and how much you can pay into Social Security. And if they raise that cap on how much people can pay into Social Security, they have to pay them more later. So potentially it might fix a problem in the short term of like, oh, well, we're getting more tax revenue. But when all of those rich people retire, they're owed a ton more from Social Security later.

So it's kind of a both-ends thing. Because Congress would have to raise that cap, right? Yeah. Yeah, they would have to decide to raise that. So where does this money go? It goes to currently retired folks. So the Social Security Administration

doesn't drop your money into a piggy bank and just wait for you to retire. Today's workers fund today's retirees. And leftover change goes into a surplus fund called the Social Security Trust, where it's invested in Treasury Securities to earn interest. And the government sometimes borrows from this Social Security Trust. That's what we mentioned last week as an example of intra-governmental debt. So if there's a surplus in this fund and the government needs to pay for some stuff, they might dip into that fund and then write themselves an IOU, and that IOU gets stacked onto the tally of what the government has to pay back.

And we got a lot of feedback about sharing that. And this is going to be true with any feedback we get. A lot of the feedback we get is like, guys, this is so nuanced. How can you say so few words on it? Yeah. And we do like one of our pillars in writing is brevity. Like we want to explain things concisely. But when it's a nuanced topic that just word counts are hard to capture, you know, the nuance.

And so I do understand some of the feedback because we just said, oh, Social Security, government uses the money. But I think it's important to dig into this a little bit. So what I learned was the money that you pay in, that 6.2% that you pay toward the Social Security Administration, of that, 5.3% of that goes into that old age and survivor insurance trust fund. 0.9% of that goes into the disability insurance trust fund. Okay, so for people who want to pull disability and people who want to pull Social Security, the money that you're paying in to those trust funds get paid out from those trust funds. So you are supporting your future self. Right.

In a way. There's also a program that I wonder how often it gets mixed in and confused, and it's called supplemental security income. So Social Security SS, Supplemental Security Income, SS. That is also overseen by the Social Security Administration. However, it is not funded by any Social Security trust. It is funded through general tax revenues. And the purpose of supplemental security income is for old people who are disabled

or don't have a lot of money. There's a very strict income limit on that program. So, and as far as like a breakdown, about 62% of disabled working age beneficiaries get Social Security or disability insurance only. You can't get Social Security and disability, by the way. You have to pick one Social Security trust to draw from. So if you're disabled before you retire, you can get disability. and then once you turn retirement age,

that just turns over into your retirement. And then 29% of people who get money, supplemental income, are receiving just that supplemental security income. And so 9% are receiving either disability and supplemental income. Okay. So that's a lot of numbers.

So the majority of people are just getting Social Security or disability. A third are getting this government-funded supplemental income that does get paid out from tax revenues. And then a small percent of those people might also be getting their disability insurance that they did pay into. So I think the pushback that we made it sound like the government was borrowing from what other people have paid in in order to pay out people who didn't pay in is probably. fair pushback on how we worded it. But just to clarify, there are people who get paid from the government if they are old and don't have a lot of income or resources, that those funds come from a different trust than what you've paid into. Yeah. As food runs out in places like

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emergency groceries, life-saving formula, long-term food security, and the gospel message. A gift of $12 feeds an orphan. Visit servingorphins.org forward slash the pourover or click the link in the show notes to give the gift of a full belly today. Talk about nuance. Talk about nuanced. Okay, let's talk about how much people get.

So it depends. Payouts vary on how much you earn over your career and your retirement age. So the earliest that you can claim retirement benefits is 62, though you don't get the full amount of retirement benefits you're eligible for until you turn 67. And if you weigh even longer up to 70 years old, you can earn even more. So on average, though, a retired worker in the U.S. right now earns about $2,084 a month. Okay, so if you do want to retire before you turn 67, you can retire. You can retire or start retire in the sense of you're starting to draw Social Security. You can retire once you turn 62.

But there's a penalty. Yeah. For lack of a better term. Yes. If you retire at 62, you earn 70% of the benefits that you would have gotten if you had waited until retirement age, which is 67. And that that goes up. So if you retire at 63, you earn 75%. Or 64, you earn a little bit more.

But you're stuck with that. So if you retire at 62, you're stuck with 70% of your benefits. Or if you retire at 63, you're stuck with 75% of your benefits. And then on the opposite side of that, if you wait past 67, up until age 70, you could earn more. And it goes up by 8%. So if you retire at 70, you could earn. 124% of your benefits and you get that. But it's capped. Yes. You know that Ida? It's capped to 124%. Interesting. Okay. So if I were to wait and retire at 68, then it would be 108%.

Got it. Okay. And so one other thing I did see. So you can work while you're drawing Social Security, but if you chose to retire early in the sense of you want to draw a Social Security before you turn 67, then you can only work, you can only make a certain amount per year. So there's an annual limit on how much you can make while you're drawing early Social Security. And so it's something like, depending on your age, they'll deduct a dollar for every two or three dollars that you make over this annual limit. But then if you, you know, you chose to retire early, you're receiving 80% of your benefits, and then you finally turn 67, then you can keep working, pulling your social security and it doesn't matter how much you earn. So there's all these little

interesting math equations and caveat. Yeah. Lots of options. Yeah. So maybe don't work and pull your social security. I feel like I would need to sit down if I were truly faced with this decision. I have to sit down with a CPA and be like, what job could I get in order to maximize? You know what I mean? Like you're going to have to crush the numbers. Like what's worth it? K.A. Is Social Security going broke? So a lot of people are wondering about that. From the 1980s to 2020, Social Security pulled in more money than it paid out. And it was banking on the surplus for the day when retirees outnumbered paying workers.

And that day is today. Times now. So barring legislation changes the fund that specifically pays retirement benefits, the OASI, is projected. to run dry by the fourth quarter of 2032, with 78% of scheduled benefits payable at that time. Congress has a few options, and among those include raising Social Security tax, trimming benefits, raising or removing the wage cap, or increasing the age at which someone qualifies. What is something that you learned that you didn't already know? There were lots of things. I really didn't know very much about.

Social Security going into this. I didn't know that social security was more than just retirement. I didn't know that when we're talking about that, there's the old age and survivors insurance. So the survivors of deceased workers, I didn't know that. And then disability fell under social security as well. That was new for me. Yeah, I didn't know anything other than in friends when Rachel gets her first paycheck. And she's like, who's Spica? That's funny. What about anything you got wrong in your head before we started digging in? I think I had this kind of, and I think a lot of people can, like, doom and gloom perspective on Social Security of like, well, I'm paying into this now for something I'm not going to get later. Anything a lot of people can feel that way about like, well, this isn't going to be around for that much longer. And most of what I was reading actually was a far more optimistic than that. of like it wouldn't take very much to get social security back to a healthy place financially. It may not be very fun, like a very fun process, but there are things that Congress can do to get social security back to a place where it is still a thing.

Yeah. And it has been, I read it was, it's considered one of the greatest poverty fighting efforts in U.S. history. I mean, makes sense. came out of Great Depression, they were like, we got to do something. Yeah. What Christian perspective do we have? Thinking about all these things that we can feel very scared and anxious about. Because our hope is built on God's promises, not social security benefits. We can be content and even joyful in the face of dwindling funds. In Christ, we are fabulously wealthy. The saints have become rich through the poverty of Jesus, guaranteed a glorious inheritance that can't slip suddenly away when finances

take a turn. And I think Ephesians chapter 1 verses 17 through 19 are hopeful they say, I pray that the God of our Lord Jesus Christ, the glorious Father, would give you the spirit of wisdom and revelation in the knowledge of him. I pray that the eyes of your heart may be enlightened so that you may know what is the hope of his calling, what is the wealth of his glorious inheritance in the saints, and what is the immeasurable greatness of his power toward us who believe, according to the mighty working of his strength. Thanks, Kay. Well, before we go,

let's take a moment to say a prayer for humility. Humble Savior, our minds are prone to dwell on our own interests. Our needs, our comforts, our feelings, our hurts. As we read today's headlines, open our eyes to the needs, comforts, feelings, and hurts of others and grow our compassion for the neighbors right in front of us who are weighed down by their cares. May we be slow to anger and ever curious, seeking to understand rather than be understood. Make us more like you, Jesus, humbly serving rather than seeking to be served. Help us die to ourselves as you died for us, trusting you to remake us for your glory.

Amen. You enjoyed this episode. Make sure to like and subscribe. You can find all of our past explainers and our Monday, Wednesday, Friday news summaries on YouTube, Spotify, Apple Podcasts, or wherever you get your podcasts. So until next time. Bye. The other day in the kitchen, I poured citrus element powder in my water bottle.

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