As Social Security enters its 90th year, Congress faces a fiscal deadline.
Social Security has a cash flow problem. For years, the agency has paid out more in benefits than it receives from payroll taxes.
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Americans love Social Security, but no one wants to pay for it, a new survey finds.
A survey of 2,000 adults by the Cato Institute, a libertarian think tank, found that 53% of Americans under 30 would rather cut benefits to current retirees to maintain Social Security than raise taxes to maintain benefits. In contrast, 89% of seniors 65 and older said younger workers should pay higher taxes to keep current retirees’ benefits stable.
Social Security benefits are at risk of being cut by more than 20% in 2033 unless Congress does something to shore up the program’s finances, but no one, including Congress, can agree on what reforms should be made.
“There are no good options on the table,” said Emily Eakins, director of polling at Cato. “We just keep having bad choices.”
Do people even understand Social Security?
Further complicating the problem, most Americans don’t seem to understand how Social Security works, the survey found.
Half of them don’t know that Social Security is a pay-as-you-go system, where current workers’ payroll taxes go toward benefits for current retirees, rather than the workers’ own future retirement benefits, Cato said.
According to the poll, nearly two-thirds of respondents consider Social Security to be a self-funded retirement savings plan.
One in five people mistakenly believe that their payroll taxes are “invested” in a “Social Security Trust Fund” until they retire. 8% think their taxes are kept in a personal account, and 21% admit they don’t know what their payroll taxes will be.
The survey found that nearly half (43%) don’t even know what payroll taxes are, and only 17% know that the tax is split approximately 12% between employers and employees.
“There’s a significant lack of understanding, not just in terms of how it works, but also in terms of the structure and how[the program]was designed in the first place,” Ekins said.
What is Social Security?
Social Security is a federal anti-poverty program established in 1935 as part of President Franklin Delano Roosevelt’s New Deal after the Great Depression.
Social Security was never intended to be people’s only source of income in retirement. According to the National Council on Aging, this represents about 40% of the average salaried worker’s income in retirement.
Active workers fund current retiree benefits through payroll taxes. The Social Security Trust Fund is a government fund that holds excess payroll taxes used to pay Social Security. When there were more workers paying payroll taxes than Social Security beneficiaries, the surplus money was kept in a fund and invested in U.S. Treasuries.
But that changed in 2010, when payroll taxes coming in were no longer enough to cover Social Security needs and the government began putting money into the Social Security Trust Fund. The first baby boomers, the largest generation at the time, began receiving Social Security in 2008.
And the U.S. population continues to age. In 2025 alone, a record 4.18 million people are expected to reach the age of 65. By 2050, the number of people aged 65 and over is expected to reach 82 million, an increase of 42% from 58 million in 2022, and their share of the total population will rise from 17% to 23%.
What can you do to save on Social Security?
Over the years, policy experts have suggested everything from further raising the eligibility age for full benefits, cutting benefits, raising taxes, or a combination of those ideas. Ekins said no deal has been reached on any of the proposals, and it doesn’t help that Americans don’t understand the program.
Without a better understanding of what Social Security is, she said, “the public won’t understand why Social Security isn’t a retirement savings program and why there are such huge gaps in the system.” “This lack of understanding makes it even more difficult for policymakers and reformers to garner public support for needed changes.”
Ekins said that given the lack of widespread education about Social Security, Congress should consider creating an independent bipartisan commission empowered to consider and enact reforms. According to Cato’s research, most Americans (71%) support this option.
Eakins said the commission would be similar to the Base Realignment and Closure Commission (BRAC), which Congress tasked with recommending ways to close and consolidate military bases in the 1990s.
Delegating the task to an independent commission would also provide cover for politicians. If they “delegate and let the committee make tough decisions, they can say, ‘Don’t blame me! I would have voted against it,'” Ekins said.
Medora Lee is USA TODAY’s money, markets and personal finance reporter. Please contact us at mjlee@usatoday.com. Subscribe to our free Daily Money newsletter for personal finance tips and business news every Monday through Friday morning.
