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.
S. W.
i would like to know why is it so hard for senior ciz to get food stamp, they say we make to much are we get to much on our SS, we have people that can work oh in other words they are working and get food stamp, we the seniors have to pay for our insurance, med’s buy food pay rent and other things but we can’t get food stamps to help us out the U.S does not take care of their seniors, what’s real going on.
Dee
No they don’t…but they give fd stamps to e/body that comes to the US or to those who can’t stop having babies, it’s all a game, I’ve seen it…a petition needs to be started..
JoAnna c.
If by some miracle the politicians had to live on SS as we do it would be much higher with nice annual increases. They should have the same benefits, including insurance and term limits. GO TRUMP!!
Chris
The politicians have paid into Social Security since the 1983 Budget Omnibus Bill signed by President Reagan! Sorry you think Trump is the answer to all your problems…if he were to win you would find instead of platinum and diamonds he would only shower rusty pewter and terribly ugly low value zirconias upon you!
Ben
What people forget, the reason there is a shortfall is because the government borrowed money from the fund and never paid it back. President Ronald Reagan fixed the Social Security shortfall. people forget these facts. and it is only because of bad practices that we gave this crisis. Any fix proposed in the future should include a restriction that the government may not for any reason borrow money from the fund. Otherwise we will face the situation again and again. Politicians don’t like to talk about the real reasons but it’s in the news media occasionally it needs to be brought to the Forefront and solved. Entitlement has become a bad word however when I grew up, I was told I did not have a choice that money would be contributed to Social Security and when I got to retirement age it would be there for me. For those who want to phase out Social Security then if you must do it, take gradual steps, perhaps a hundred year plan that way it is painless and you’re not going to hurt innocent people. I hear politicians say cut them off at the knees easy for them to say as they get a full retirement. Another good fix would be to give our politician the exact same Social Security plan that we have and nothing more! I doubt that there would be any Cuts if they had the same plan.
S. W.
you are so right,
Laura R.
Sorry, but Social Security is NOT an “entitlement”. When I was working, I paid into the fund, just like you. I’m now getting a portion of what I paid in.
Richard S.
NO! you will wind up getting far more than you put in!
Libmat
The contributions into the social security fund, if invested continuously over the typical 45 year work life from 21-66, conservatively would have resulted in at least quadrupling it’s original value. Therefore, no, you are not getting far more than you put in at all, but way less. If a credit card bill of $5000 paid back over 10 years’ costs are doubled at 18%, imagine a small lifelong $140,000 SS tax invested over 45 years? How about 300,000 invested over 45 years?
Paul W.
Johnny R is correct. California does not Tax SS benefits, no matter what your income is. The Feds do tax it if you make over a limited figure.
Dee
Yes, maybe they would be more compassionate..
Ray F.
Ben, Social Security is a pay-as-you-go system. Social Security taxes collected from today’s workers pay the benefits of today’s retirees. Any funds in excess of what is needed to pay today’s benefits are invested in special issue, U.S. Government, interest-bearing securities. This investment – the purchase of U.S. Government securities – is what constitutes the “borrowing” that people are sometimes concerned about. Any funds that have been “borrowed” from the Social Security Trust Funds have always been paid back in full, plus interest. Please check out our Trust Fund Frequently Asked Questions page for more information.
A. U.
Mr Fernandez, The only posts you comment on, involve when someone says something about the govt dipping in and taking funds out and not paying it back.
You can keep posting your same comment over and over but your not being truthful to anyone.
Its a fact that the millions that obama took to fund his worthless obamacare health care plan will never be paid back. Its been a sinking ship from day one. Thats why he lied over 30 times telling citizens “You can keep your own doctor”. He never intended affordable health care,he only intended to screw us with outrageously high premiums to everyone. As far as i am concerned he is a down right out THIEF.
Ww
If the government stops dipping in the social security funds there would be no issues it’s not the governments piggy bank
Dee
The truth has spoken..
Connie B.
All people should pay social security on wages from their employer. If wages go up, so should the amount to social security.
John O.
That is basically what happens. Remember when you add people paying in you add to the number you pay out to, with a net effect of zero.
B. H.
Quit taking money from Social Security to fund the disability component. Pony up and make all of the IOU’s good from the government today and quit rading SS to fund other government programs. With over $19 trillion in debt I do not have much faith in the givernment credit rating.
Laura R.
I worked my fair share and paid into Social Security. I now receive Disability payments every month; without it, I’d be living under a bridge, using the services YOUR taxes would be paying for. Is that what you want? All the disabled people to suffer even more?
Ed A.
The disability system needs to be fair to all participants in both systems. …Social Security should pay you proportionate to your built up benefits, and any additional needs supplemented by other relief systems at both state and federal levels. ….Supporting the disabled at the expense of the rest of the Social Security recipients is equivalent to theft!
Debbie
Not at all.
But I would like to see a lot of those disabled people helped so they can return to being a productive part of society. Some of these disabilities are treatable.
And then there is the massive fraud side of the disability fund. I imagine if we were to eliminate just the fraud it would make a tremendous difference.
Julie B.
I have worked full-time for many years…18 of those years with MS…I now get SSDI and need to find an insurance by 9/1/16 that my husband and I can afford…He works, so no Medicaid for me….Even though I will probably get help from an organization to help pay for my injectable med, I am trying to find an insurance that won’t take my whole disability check each month. It’s like “they” want to take everything away from us that we have worked so hard to get. Thanks for letting me gripe!
Dee
Yes it would.
Mousielove
Why can’t the cap be eliminated? Seems to me that would solve a lot of funding issues.
John O.
It would solve nothing, without other legislated changes, we’d just end up paying out more negating the increased income.
Brij
How come congressional( senator and representative) get automatic raise and we do not get or sometime do no get cost of living adjustment.
Patti
because they hold the purse and they control everything until we vote them out!!!!
Debbie
A lot of good that does to vote them out…. another group comes in just to be indoctrinated into the same way of thinking.. It’s a political cycle of madness….
Dee
It’s time to vote them out, they get to spend big time monies and live large, but we have to cut corners on e/thing, so we little guys keep suffering while their pockets get bigger.
Bill C.
How far into the future are welfare, Medicaid and food stamps funded??
John O.
Infinity!
Laura R.
Those are state programs, not federal.
Tax p.
Until people stop paying taxes.
Retiree
It’ll never end as long as we have parasites in the USA.
Keith P.
I’m afraid most all living things are parasitized by something…even bacteria fall prey to some viruses. You could draw an analogy to big business and the wealthy, for instance, who make the public pay for their financial mistakes but twist right wing media and politicians to trick voters into making them above the law, all while reaping huge fortunes. Yes, they really are like human parasites, although I hesitate to apply such an awful term to any human being. But I see your point.
al s.
Lift the cap now!