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
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Tags: Disability, retirement, Trustees Report
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Carolyn Colvin, Acting Commissioner of Social Security
Acting Commissioner of Social Security (February 14, 2013 - January 20, 2017)
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Tax p.
I am just glad I get my monthly benefit since I paid for it, so I don’t feel bad. Many people that have never worked get SSI and Medicaid and some of them live better than some of those that get Social Security, and to me that’s not the way it’s suppose to happen.
Catherine
Social security benefits are decreased under the Windfall Elimination Act for anyone with uncovered wages. Is that money taken out and put elsewhere or just left in the social security fund?
Ray F.
Hello Catherine: Thank you for your question. The Windfall Elimination Provision simply affects how we calculate your retirement or disability benefit. The Social Security benefit is reduced and not paid out.
Kev
I think it is a crime that the feds use force to make us invest in their poorly funded retirement plan. Just imagine if I was to take money out of every one of your pay checks and force you into a retirement program that will never pay you back what you put into it. I would go to jail. Yet the FEDs today republican and democrat all seem to think they are above the law. They do many things to us that would be a crime if I was to do them to my neighbors. I do not see how this is seen as anything but extortion and crimes agains humanity.
terry c.
it would seem to me that if you want social security to be around beyond 2034, major reforms are needed, like the following:
1: turn social security into a IRA type format, to where people’s number is a account number, and they earn 10% interest every month, as per the amount taken out of that person’s check.
2: find a way through the budget to replace the missing $1.4 trillion.
3: have social security protected by FDIC.
4:put social security back into a trust fund instead of the general fund.
Ray F.
Thank you for your input Terry. In addition, Social Security’s independent actuaries have analyzed over 100 policy proposals from lawmakers on both sides of the aisle. Please visit the Actuary’s website.
KATHLEEN H.
All we have to do is get Congress to eliminate the cap on SS taxes. Too many (wealth) Americans complete this tax obligation in the first month or two of the year, paying ZERO after that.
Kev
Why should government violence force any one to pay into a retirement plan with negative returns? SS is a scam that should be dropped. And I have the Working Man Blues too.
maria r.
For a benefit that started out with the first recipients getting the benefits without contributing a dime, Social Security has come a long way. The biggest hurt to the program was the “loan” taken during the Great Reagan Administration, using the fact that the money was just “sitting there”. Based on the inability of the federal government to eliminate deficits in budget and allowing overgrowths in welfare programs, it is a wonder they want to not pay anything for the seniors in their time of need. When one retires, you go on a fixed income yet all cost keep going up. Certain costs should be mandated stable when one reaches retirement age but only for that individual. (e.g. rent for rest of life but new tenant even if relative pays current rent level) Taxes for income in retirement under $40,000 should tax free. As it stands right now, $25,000 is the maximum, including Social Security. I believe the reason California taxes Social Security is because of the large number of immigrants (legal illegal) who make low wages and pay minimum taxes if any. The only people who pay taxes actually made living wages during their work life. Then you get stuck paying for others when you retire. I am only angry about paying taxes on my social security because I had to retire 18 months earlier than my full retirement age so my benefit was cut. That cut would been paying the taxes I have to pay.
tammy
If the Socialist Security System is so well funded, why do they continue to show prejudice and discriminate against Adult disabled children who marry able bodied persons? How does getting married to an able bodied person, make a disabled person any less disabled? Does marriage somehow cure my disability?
Answer= no, marrying an able bodied person does NOT make me any less disabled.
Answer= No, marriage to an able bodied person does not cure disability (but the Socialist Security system will use that EXCUSE to deny benefits).
Even if you are disabled (like me) the Socialist Security system will deny you benefits, because of special “rules” they have on the books. These “Rules” have been put in place to help the Socialsit Security system, justify their actions of discriminating against married people.
Even if you are legitimately 100 percent physically disabled, The Socialsit Security administration does NOT CARE! ” The law defines disability as the inability to engage in any substantial gainful activity (SGA) by reason of any medically determinable physical or mental impairment(s) which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months.
The Socialist Security System may find that one is completely and totally disabled, but as soon as you marry an “able bodied person”, somehow they miraculously cure you, of your disability.
All of a sudden, you are not physically disabled anymore and not eligible for any benefits from these socialist. HOW DOES BEING MARRIED MAKE SOMEONE ANY LESS DISABLED?
answer- IT DOES NOT. it’s just an idiotic rule that some bureaucrat (who has a personal hatrid of marriage and married people) came up with, to legitimize their prejudice and discriminatory practices.
AJ
sounds like you received benefits from a parent you were dependent on. When you marry, you are no longer dependent on your parent. The “adult child”—including an adopted child, or, in some cases, a stepchild, grandchild, or step grandchild—must be unmarried, age 18 or older, and have a disability that started before age 22. If he or she receives benefits as an adult disabled since childhood, the benefits generally end if he or she gets married.
Luis A.
SI E TENIDO QUE REPETIR SRA.COMISIONADA POR QUE NO RECIBO UNA RESPUESTA POR PARTE DE UD. YO CREO QUE ESTÁ PÁGINA FUE CREADA CON ESTE OBJETIVO SERVIR EN PARTE A LOS CIUDADANOS DE BAJOS INGRESOS MUCHAS GRACIAS POR LA ATENCIÓN LUIS ALBERTO BARRANTES.
Ray F.
For information in Spanish, please visit us at http://www.segurosocial.gov or http://www.facebook.com/segurosocial.
Luis A.
POR FAVOR ESTAMOS JUEVES 23 Y LA SUPERVISOR DEL SEGURO SOCIAL ME DIJO QUE EL LUNES PASADO ME HIBAN A LLAMAR PARA HACERME PREGUNTAS Y NADA NO SALGO DE MI APARTAMENTO ALQUILADO EN 859.OO. DÓLARES MI INGRESO ES 320.OO DÓLARES MI SRA.TIENE DE 15 A 22 HORAS EN PUBLIX LOS GASTOS DE COMIDA PASAN DE 35O.OO AL MES. SEGURO AUTO 245.OO AL MES,45 DÓLARES SEMANALES GASOLINA DE 95.OO A. 110.00 A LA F P L. GASTOS QUE ESTOS PAGANDO PARA UN ENTIERRO DECOROSO CEMENTERIOS CATÓLICOS 99.90.DÓLARES MENSUALES OTROS GASTOS ROPA ECT ECT. YA SE PUEDE IMAGINAR DISTINGUIDA COMISIONADA. CALVIN LOS MOMENTOS DE DEPRESION QUE VIVIMOS DOS CIUDADANOS QUE TRABA MOS Y MI SRA.SIGUE TRABAJANDO LO ÚNICO QUE QUISIERA SE ME CON SEDA UNA CITA CON JEFE DE LA ADMINISTRACIÓN DEL SEGURO SOCIAL AGENCIA FLORIDA DE W.FLAGER muchas gracias por la atención comisionada y por darme la oportunidad de enviarle este mensaje SOS.
Ray F.
For information in Spanish, please visit us at http://www.segurosocial.gov or http://www.facebook.com/segurosocial.
Matilda
I am in need for dental & vision Insurance like RIGHT NOW! & with my SS Retirement I can’t Afford any, even if I could squeeze a lil something a month out of my monthly funds to try & grt them I don’t know if I could keep the payments up all the time for (2) people, i’ve received several types of mail from different insurance companies that wants me to insure with them but there cost is too high for me & my spouse put together, I receive Medicare prt. A & B, but I need prt. D that cover dental & vision for the two of us which I can’t afford, I have to tooth that broken off @ the gum, also my partial done wore dwn to the metal & ea day I hope & Pray it doesn’t break on me if it does I will be in a pickle (words of expression ) I am in really need of these insurance, and as far as my eyes, I have what you call a disease call Uvenis & it’s in the eyes (both), but medicare pays for me seeing the doctor for it for so many visits, but not for other things like glasses etc. So if there is a insurance that’s less then a 100$ a month for both Ins. (Eyes & Vision ) Pls give me there where abt that will be in Me & Medicare approval, like I stated I do not have the funds for a LARGE AMT to be deducted from my monthly pension after rent, utilities, meds, Ins, food, etc. So you see where I am coming from. Thanks for your Help & Response if there are any.
Ray F.
Hello Matilda. Generally, Medicare does not cover most dental care. However, Medicare Part A (Hospital Insurance) will pay for certain dental services that you get when you are in a hospital. Part A can pay for inpatient hospital care if you need to have emergency or complicated dental procedures, even though the dental care is not covered. Visit http://www.Medicare.gov to learn more about Medicare Part D, cost sharing programs and other important information. We hope this helps!