Social Security's bond portfolio locks in returns that cannot cover its $103 billion deficit

The Old Age and Survivors Insurance program ran a deficit of $103 billion in 2024. The trust is set to generate roughly $58 billion annually from its $2.3 trillion in holdings. This return is suppressed by the portfolio's composition: three-quarters of the portfolio was held in issues with interest rates of 2.25% or lower as of the end of February. The average interest rate on the Old Age and Survivors Insurance trust is 2.52% as of the end of February. These returns are the result of a mandate that permits the trust funds to invest only in government-issued securities. The trust fund asset reserves will be depleted before the end of 2032.