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.
KW
It’s funny how people talk about illegal immigrants using food stamps, etc. Whenever I am in the market I see white and black americans buying full shopping carts worth of stuff, then using food stamps to pay. Then they drive off in a Cadillac Escalade. Who’s milking the system now?
Charles
Cut the program. It is quite clear the government is unable to manage the money we gave them. They are coming up short and I am not about to give them more money because they used the money I gave them inappropriately
ss
i draw my exs benefits,when i ge old enough to draw my own will his stop.
Ray F.
If you are eligible for benefits on your own record and divorced spouse’s benefits, we pay your benefit first. If the benefit on your ex-spouse’s record is higher, you will get an additional amount on your ex-spouse’s record so that the combination of benefits equals that higher amount. In some cases, a person could be entitled to more than one benefit at the same time and may receive a combination of benefits equaling a higher amount. For example, a person may be entitled, as a retired worker on his/her own record and also as a spouse, divorced spouse or widow on another record. However, this individual’s benefit amount can never exceed the highest of either benefit amount to which they are entitled to. Please see our Retirement Planner: If You Are Divorced, for more information.
Ronaldo c.
Why he not said me my property
Ronaldo c.
why
1st.lt. k.
my address id 6776 townsend rd. apt. 81 Jacksonville fl. zip 32244 duval county I’m keith
1st.lt. k.
please were military family in a hardship jam we and mom me dathers sons mother in law and uncles need checks sent to us because of the case of being robbed by Samuel alexander I told some banks about it my last four social is 1333 date of birth is 07/05/1973 phone number 9046618273 soon going to school at devry and ju.edu usaa going to pay for it but I need a boost give me a call help a mil.osd family out please tell trump about him he tried to robbed the tax code sams a pit load of crap
Michael W.
If I am currently receiving social security benefits, will they decrease in 2034 or is my amount grandfathered in?
Tequila
I would like to point out my love for your kindness giving support to people who should have help with this important topic. Your very own dedication to passing the message across appears to be definitely powerful and has truly allowed employees just like me to achieve their endeavors. Your new insightful facts indicates much to me and extremely more to my fellow workers. Best wishes; from each one of us.
http://rina85.spruz.com/manage/Default.asp?
Retiree
I want to thank all of those that are working now because I need for you to work, so I can continue to get my benefits. I had to work while other got theirs, so now it’s your turn to provide for me. Isn’t America great.