What Is OASDI?

Define OASDI in Simple Terms

The federal old-age, survivors, and disability insurance program, or OASDI, is a social security program that provides benefits to retirees and people with disabilities, as well as to their spouses, children, and survivors.

The purpose of this system is to partially compensate for income that is lost due to old age, the death of a spouse or qualifying ex-spouse, or disability.

What Does OASDI Mean in Finance?

Payments are funded by OASDI taxes, which are part of a larger set of taxes known as FICA, or Federal Insurance Contribution Act, taxes.

This revenue is held in two trust funds: the old-age and survivors insurance (ASI) trust fund for retirement, and the disability insurance (DI) fund for disability.

These funds pay out their benefits and invest the remainder of what they collect.

OASDI Program

This program is the largest of this type of system in the world, and is also the United States’s largest single expenditure, projected to cost $1.17 trillion in 2020.

The program was initiated by the signing of the Social Security Act of 1935 by then president Franklin Delano Roosevelt.

The program has grown over the years to match changes in the US population and economy.

In 1940, about 220,000 people received an average monthly benefit of $22.60. In 2020, there are over 63 million social security recipients, who earn an average benefit of $1,503.

Learn more about OASDI

The federal old-age, survivors, and disability insurance program is an important social security system that compensates for lost income due to retirement or disability. If you are looking to learn more about how this type of compensation works or if you want help understanding the eligibility requirements, feel free to reach out to a financial advisor in Menlo Park, CA. For those of you that do not live locally, please visit our financial advisors home page to see the areas we serve.

Old-Age, Survivors, and Disability Insurance (OASDI) Program Definition FAQs

OASDI stands for the Old-Age, Survivors, and Disability Insurance Program.
The federal old-age, survivors, and disability insurance program, or OASDI, is a social security program that provides benefits to retirees and people with disabilities, as well as to their spouses, children, and survivors.
The purpose of this system is to partially compensate for income that is lost due to old age, the death of a spouse or qualifying ex-spouse, or disability.
The program was initiated by the signing of the Social Security Act of 1935 by then president Franklin Delano Roosevelt. The program has grown over the years to match changes in the US population and economy.
Payments are funded by OASDI taxes, which are part of a larger set of taxes known as FICA, or Federal Insurance Contribution Act, taxes. This revenue is held in two trust funds: the old-age and survivors insurance (ASI) trust fund for retirement, and the disability insurance (DI) fund for disability. These funds pay out their benefits and invest the remainder of what they collect.

Disclaimer: The above references an opinion and is for information purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice.

True Tamplin, BSc, CEPF®

About the Author
True Tamplin, BSc, CEPF®

True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.

True is a Certified Educator in Personal Finance (CEPF®), a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.

To learn more about True, visit his personal website, view his author profile on Amazon, or check out his speaker profile on the CFA Institute website.