Social Security Funded Until 2034, and About Three-Quarters Funded for the Long Term; Many Options to Address the Long-Term Shortfall
Reading Time: 3 MinutesLast Updated: June 22, 2016
The Social Security Board of Trustees today released its 76th annual report to Congress on the financial status of the Social Security trust funds. As a trustee of Social Security funds, I work with the other trustees to ensure the public is informed about the status of Social Security’s finances for the short term and over the next 75 years.
Workers earn their Social Security benefits by contributing through deductions from their paychecks. The Social Security trust funds include the Old Age and Survivors Insurance (OASI) fund, which pays benefits to retired workers and their families and to the families of deceased workers; and the Disability Insurance (DI) fund, which pays benefits to disabled workers and their families.
Today’s report shows that, as a whole, Social Security is fully funded until 2034, and after that it is about three-quarters financed. Considered alone, the DI Trust Fund is projected to become depleted sooner than the combined Social Security funds. I am pleased that legislation signed into law by President Obama last November averted a near-term shortfall in DI. With that small, temporary reallocation of the Social Security contribution rate, the DI fund will now be able to pay full benefits until 2023, and the retirement fund alone will be adequate into 2035. It is important that Congress act well before 2023 in order to strengthen the finances of the program as a whole.
Young people frequently ask: “Will Social Security be there for me?” I take this question very seriously, and I am sure Social Security will be there in the future. Its total cost is now about 5% of the national economy, or GDP. That will rise to about 6% when all of the baby boomers are retired. That increase, 1% of GDP, is less than the nation’s increase in spending for public education when baby boomers were children.
As President Obama recently said:
“Fewer and fewer people have pensions they can really count on, which is why Social Security is more important than ever. We can’t afford to weaken Social Security. We should be strengthening Social Security. Not only do we need to strengthen its long-term health, it’s time we finally made Social Security more generous, and increased its benefits so that today’s retirees and future generations get the dignified retirement that they’ve earned.”
Like the President, I am confident we will rise to the challenge. Social Security is an earned benefit—a benefit that is critically important to the people who receive it. It is a foundation of economic security when workers and their families face what Franklin D. Roosevelt called “the hazards and vicissitudes of life.” It is the nation’s most effective poverty prevention program, keeping 21 million people out of poverty. So when we talk about Social Security financing, it’s not just a budget exercise – it’s our retirement system and our family economic security system, now and for the future.
Lawmakers have many policy options to address the shortfall: increasing contribution rates, lifting the cap on earnings subject to contributions, drawing on other revenue sources, lowering benefit amounts, or a combination of changes. Social Security’s independent actuaries have analyzed over 100 policy proposals from lawmakers on both sides of the aisle, and those results are available on the Actuary’s website. Lawmakers should act soon to address the long-term shortfall and preserve the reserves that yield interest income to help pay future benefits.
I am confident about the future of Social Security. We look forward to continuing to serve the American people by delivering the foundation of economic security that we know as Social Security
Did you find this Information helpful?
Tags: Disability, retirement, Trustees Report
See CommentsAbout the Author
Carolyn Colvin, Acting Commissioner of Social Security
Acting Commissioner of Social Security (February 14, 2013 - January 20, 2017)
Comments
Comments are closed.
Keith c.
Why then are people? Saying that Trump s plan is to shut it down in three years. I sounds much like a scare tactic from the Democratic Party. There are a lot of people that have concerns about loosing. Social security payments. We payed into them forty over fourth years. I would like to get what I invested into the plan. I’ve been told it’s like a piggy bank for the nation, borrowing from it but never replacing ,w hat they took out. A true and honest answer would be greatly appreciated,so I can tell others.
Dennis e.
Can spouse collect on her husband and also.collect her own social security
V.V.
Hi Dennis, thanks for using our blog to ask your question. We will always pay a person’s own retirement benefit first. If benefits as a spouse are higher than their own retirement benefits, the individual will get a combination of benefits equaling the higher spouse benefit. However, a spouse’s benefit cannot exceed one-half of the worker’s full retirement amount (not reduced benefit amount). So, a person can only receive additional spouse’s benefits if their own full retirement benefit (not their reduced benefit) is less than half of their spouse’s full retirement benefit.
Generally, during the initial interview when applying for Social Security benefits, we typically explore all other benefits that could yield a higher benefit amount.
John P.
How long ago was it first projected that the SS trust fund would be depleted in 2035 or there about? In other words, how long has Congress known that this scenario was coming?
ROGER M.
I am 75 years old. I am collecting my social security. However, I am still working. and paying social security WHY?
A.C.
Hi, Roger. Thanks for your question. The Federal Insurance and Self-Employment Contribution Acts (FICA and SECA) require the withholding of taxes from wages of all employed people, and the net earnings of most self-employed people, for the Social Security and Medicare programs. Therefore, you will continue to pay taxes regardless of age. We hope this helps.
باران .
SSI is not enough! I started saving when I turned 25, some 40 years ago.OK but should hsvs done more,got mixed up with. Religoutf group that That hurt me financially kept me from a degreee that would have helped!
باران چت
FRANCISCO R.
WHERE CAB I CHANGE MY ADDRESS ON LINE. BEEN LOOKING FOR MY PROFILE ON LINE AND CANNOT FIND THE LINK TO MY PROFILE
A.C.
Hi, Francisco. If you are receiving Social Security retirement or disability, you can create a personal my Social Security account to change your address online. If you are receiving Supplemental Security Income, you should contact your local office immediately. We hope this helps.
Mahira
Your website provides good information. I’m gonna share it with all my classmates. I am searching for fully funded scholarship and I found some at thescholarshipsblog.com but I am looking for more opportunities. Can anyone help me? thanks
John G.
If the benefits get reduced in 2035, will that affect recipients already receiving funds or just newbies to the system?