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What
are Social Security Trust Funds?
The
Social Security trust funds are financial accounts in the U.S.
Treasury. There are two separate Social Security trust funds,
the Old-Age and Survivors Insurance (OASI) Trust Fund pays retirement
and survivors benefits, and the Disability Insurance (DI) Trust
Fund pays disability benefits.
Social Security taxes and other income are deposited in these
accounts, and Social Security benefits are paid from them. The
only purposes for which these trust funds can be used are to pay
benefits and program administrative costs.
The
Social Security trust funds hold money not needed in the current
year to pay benefits and administrative costs and, by law, invest
it in special Treasury bonds that are guaranteed by the U.S. Government.
A market rate of interest is paid to the trust funds on the bonds
they hold, and when those bonds reach maturity or are needed to
pay benefits, the Treasury redeems them.
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