Social Security in Plain English

Social Security is the United States' public retirement programme. Workers and employers pay a tax on wages, and the government uses that money to pay monthly benefits to retirees, as well as to disabled workers and to families of workers who have died.

It works mostly on a pay-as-you-go basis: today's workers pay for today's retirees. When workers far outnumbered retirees, the system collected more than it paid out, and the surplus built up in a trust fund.

Americans are living longer and having fewer children, and the large baby-boom generation has been retiring. That means fewer workers paying in for each person drawing benefits. The system now pays out more than it collects, and it has been drawing down the trust fund to cover the difference.

As discussed in the episode, the trust fund is expected to run short in 2032. That does not mean benefits stop. Taxes would still be coming in, but under current law they would only cover part of the promised benefits, so payments would be cut unless Congress acts first.