No funds are being stashed away in bank vaults. No investments are being made in real assets. Most of the money is spent on Social Security benefits. Nothing is saved. The Federal Old-Age and Survivors Insurance Trust Fund is basically an accounting system used to keep track of Social Security taxes and benefits.
Many people mistakenly believe that the trust fund collects taxes and pays benefits.
In reality, the trust fund performs no real economic function. Every payroll tax check sent to Washington is written to the U.S. Treasury. Every Social Security benefit check is written on the U.S. Treasury. By contrast, the trust fund neither cashes checks nor dispenses them. Technically, the trust fund holds interest-bearing U.S. government bonds, representing the accounting surplus of payroll taxes collected minus benefits paid.