Social Security reveals when funds will run out for benefit payments
The Board of Trustees released a report on the financial status of Social Security explaining that they will be run out of money without investment.
Back in March, the Social Security Board of Trustees released their annual report on the financial status of the Social Security Trust Funds, which includes the
According to the report, cash for the Social Security program will run out in 2031, just eight-years time. If more funds are not directed to the support then 66 million recipients will have their benefits cut by a quarter.
This prediction is a year closer than the previous estimate of 2032 due to slower-than-expected economic growth.
“Social Security and Medicare are two bedrock programs that older Americans rely upon for their retirement security,” said trustee lead and Treasury Secretary Janet Yellen. “The Biden-Harris Administration is committed to ensuring the long-term viability of these critical programs so that retirees can receive the hard-earned benefits they’re owed.”
While the program won’t run out of money completely, there would be a trust fund shortfall. Retirees would receive lower Social Security payments. Social Security is estimated to provide at least half the income of 50% of older married couples and 70% of older singles.
Elsewhere, the combined asset reserves of both the Aging and Survivors Insurance (OASI) and Disability Insurance (DI) Trust Funds will be depleted by 2034. If Congress does not act before then, there will only be enough revenue to pay for the 80% of scheduled benefits. The OASI will be able to pay scheduled benefits until 2033 after which only 77% of scheduled benefits will be payable.
Social Security Trust Funds fell in 2022
The annual report states that the reserve assets of the combined OASI and DI Trust Funds decreased by $22 billion in 2022, for a total of almost $2.83 trillion.
In addition, the total annual cost of the program is projected to exceed total annual revenue this year. According to the trustees, Social Security costs have exceeded their non-interest income since 2010.
In calendar year 2022, Social Security paid $1.23 trillion in benefits to approximately 66 million beneficiaries. An estimated 181 million people had earnings covered by Social Security and paid payroll taxes.
The problem for the system to navigate is an aging population, meaning fewer workers are paying in. As of 2022, there were 2.7 workers paying into the system for each person claiming benefits, down from 3.4 at the turn of the millenium.