Question

OASDI and how it is funded, the funding status of OASDI

Answer 1

Ans-

The Old Age, Survivors and Disability Insurance program (OASDI) is the official name for Social Security in the United States.The program was created by the Social Security Act of 1935. Payments from the OASDI program are made to retirees, surviving spouses and children, and disabled workers.It is the major source of income for most elderly Americans as nine out of ten individuals age 65 and older receive Social Security benefits.

Funding-

It is funded by contributions from employers and workers. The workers’ contributions are deducted from their payroll in the form of FICA taxes. The amount of Social Security Disability benefits available to those who become disabled, or Old-Age/Survivor benefits for those who retire or lose their wage earning spouse or parent is based on how long the worker worked and how much he paid into the Social Security Disability Insurance program.

Funding Status-

The 2017 annual surplus of $44 billion increased the asset reserves of the combined OASDI Trust Funds, bringing the total reserves to $2.89 trillion at the end of the year. This amount was equal to the 288 percent of the estimated annual expenditures for 2018'