Trust Fund Reserve Gains One Year for Projected Depletion Date
Reading Time: 2 MinutesLast Updated: August 19, 2021
By now, you’ve probably heard that this year marks the 80th anniversary of the signing of the Social Security Act. In case you didn’t know, this year is also the 75th anniversary of the payment of the first monthly benefits.
And, today, the Social Security Board of Trustees released the 75th annual report to Congress on the financial status of the Social Security trust funds.
As a quick refresher: The Social Security trust funds include the Old Age and Survivors Insurance (OASI) fund and the Disability Insurance (DI) fund. Benefits to retired workers and their families, and to families of deceased workers, are paid from the OASI trust fund. Benefits to disabled workers and their families are paid from the DI trust fund.
The report shows that, combined, the funds now have an additional year – from 2033 to 2034 – before their reserves are depleted. The Old Age and Survivors fund alone also gets an extra year from 2034 to 2035.
Some factors that led to this improvement include (1) faster growth in average wages in the future, because of slower growth in employees’ private health insurance cost – due at least in part to provisions of the Affordable Care Act, and (2) improvements in how we project the earnings of American workers by age.
The DI fund is still projected to deplete its reserves late in 2016. After that, the income collected through taxes will be enough to pay only 81 percent of the scheduled benefits. So, an adjustment to maintain full disability benefits is needed soon.
The president has proposed temporarily reallocating more of the total Social Security payroll tax rate to the disability fund to give Congress more time to consider comprehensive changes to the Social Security program as a whole.
The Social Security program is sustainable, but needs some adjustments. To keep the program solvent after 2034, Congress could choose to increase payroll taxes by about one-third, reduce benefits by about one-fourth, or make some combination of these or other adjustments.
Because of the importance of Social Security to all Americans, we can be confident that Congress will make timely and well-considered adjustments, just as they have whenever needed since 1935.
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Tags: Affordable Care Act, social security, SSA
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Stephen C. Goss, Chief Actuary
Stephen C. Goss, Chief Actuary
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DHFabian
It is disturbing, if common, to see the number of absolutely false comments here. I wonder what the motives are of those who who make such claims. The facts about SSDI can be found via us.gov. It would not be possible to make requirements for SSDI more stringent. One must have medical verification that not only does a disability exist, but that it is so severe as to make gainful employment impossible (those with less severe disabilities can receive job services). Cases are reviewed regularly to determine if the recipients becomes employable to any degree. The application process itself takes a minimum of a full year (from the date of application), extensive records (medical, job history, financial, etc., etc.) For the apparent masses of the ignorant, this generation — which still provides massive amounts of foreign aid annually — has fought every effort to allow humanitarian aid to fellow citizens in need. Great lengths are taken to ensure that the very minimum is allowed for Americans in need — the elderly poor, the disabled, the working poor (the jobless poor do not qualify for any aid).
Jimbo
1/2 the population is on food stamps DH. How many double dip? Many disabilities are from obesity. The taxpayer is getting fed up with feeding the fat and lazy. Those in legitimate need suffer because of fraud not funds.
Debbie
So true!
Carolyn D.
Money should be paid back that was borrowed from the fund.
Sharron P.
What about repaying what was borrowed – with interest!? Everyone else has to pay back what is borrowed in loans, why not the government – this was not government’s money – it was ours!
Jimbo
Want to grow your own dope? Plant a politician.
lou s.
hahaha
..
Sharron, Any funds that have been “borrowed” from the Social Security Trust Funds have always been paid back in full, plus interest.
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. Investing in (i.e., purchasing of) bonds (including these special issue securities) is always a loan to the party that floats the bond – in this case, the U.S. Treasury. In 2014, the Trust Fund asset reserves earned $98 billion in interest at an effective annual rate of 3.6 percent through investment in these special issue U.S. Government securities.
Please check out our Trust Fund Frequently Asked Questions page for more information.
Ron
10-4 on that plus interest!!
Ron
10-4! And interest!!
DHFabian
The Clinton administration had made cuts in disability benefits back in the 1990s, which caused serious hardships for many. The currently-proposed cuts are far deeper than those were. We’ve seen as Congress has borrowed funds from the (significant) Social Security surplus, to meet more immediate needs.” This would indicate that funds could be transferred from other things that are less vitally important, and used to protect disability benefits. We can note that this year alone, Congress virtually ended food stamps for the disabled — a significant cut in monthly income.
Jimbo
I do believe they are trying to cut the liars not the needy.
eliedith
Bill Clinton took 750 billion from medicare to pay the debt.
To save SSDI
1 remove the cap completely
2 gradually start retirement benefits a year later for every generation
3 raise the payroll tax on the wealthy
eliedith
and yes make congress pay back every red cent they borrowed WITH INTEREST
Elaine
Yes the cut in food stamps lower our disability $200 per DI recipient to be able to pay housing etc. Makes our DI check that much less. The Clinton administration had a surplus in SS. Then the Bush administration came in the money was GONE. Lawton Chiles, gov of FL.then, had just won over millions sueing tabacco companies, i think,for a good cause for FL. FL had a surplus in our education dept. we were to have about 10 students per classroom. We were the 1st state. Jeb Bush came in as gov of FL. and THE MONEY DISAPPEARED. I AGREE LET BUSH ADMINISTRATION PAY IT BACK
Sue
I wish I shared your confidence in our Congress’ abilty to “make timely and well-considered adjustments”.
gary
The growth in DI participants is not rational. Qualification must be stricter.
Separate the DI fund from retirement benefits.
People are living longer, SS should start later.
Karen
I worked 40+years and people that has never worked draw more than I do.
Jimbo
Thank the lefties Karen.
bertiemayes
I absolutely agree that the cap should be eliminated. That would solve the Social Security problem in less than a month–in my opinion–if everyone started paying what they should starting with their next paycheck. That would also mean that the younger people would also have the assurance that Social Security benefits would be there for them and also if they should become disabled at an early age, they would still benefit by being able to received benefits for disabilities also. Also, there are tooooo many ILLEGAL immigrants that cross the borders and are immediately eligible for welfare, free phones, Medicaid, etc., and our own people who have worked hard their entire lives have a very difficult time getting these same benefits–including food stamps–that are also available to the illegals. I know this to be a fact. I have been in line at the grocery store behind people with food stamps—now called a debit card so they won’t be embarrassed to be using food stamps–with lots more food and more expensive food than we can afford to buy. A Latino checked out in front of me recently with 10 gallons of bottled water and 5-6 items from the deli and his total bill–the cashier told him after totaling up everything –was $l.80 !!!!!. I know his bill should have been at least $30.00 judging from what I saw just from the deli. This has got to stop!! And NOW!!!
gary l.
reducing benefits would be horrendous.
erasing the cap on the social security tax is the best solution. those with higher incomes, including me, can afford to pay the higher tax. as it is now, this is a regressive tax. the lowest earners pay the highest tax. similar to the sales tax.
the social security money is taxed twice. federal and state income taxes are paid on the fica and medicare component that the taxpayer pays. then when retirement benefits are received, some of which are a return of the tax payers own money previously taxed and paid in, the benefits are federally taxed again. there should be no fed or state tax on the medicare and fica component going in or coming out.
robert
You are very right. We should also stop payments for those exceeding a certain number of total assets and income from other sources at retirement.
Donald O.
I think that you are wrong about taking away SSA benefits because a person has worked and made for a good retirement. If you paid into the program then you should be able to use that addition to your retirement.
Todd
Why. I paid the tax my entire life why not let me collect or give me my money back?
Jimbo
So robert you’re OK with people paying in who can never collect???
Sounds very left wing to me.
kala
Why is the answer obvious to everyone but Congress? Eliminate the Cap!
Jimbo
No, eliminate the corruption.
Ron
How about congress repaying the money they “borrowed” from the fund.
Karen
Yes!
Jo
I agree with you Karen, and Ron. The borrowed the money, the need to pay it back.
Joe T.
I agree!
HEDY K.
Amen to that.
Also there should be no max limit.
Everyone should pay 6.2 on all their
earnings. The 1.45 % for medicare
is based on full earnings no maximum
cut off. The same should apply for
social security. Currently the lowest earners are paying the highest because
they will never reach the cut off.
By doing this it would save social security for everyone and the high earners do not object to this so what is the problem?
ERASE THE CAP
Joyce
I agree with you post on everyone paying on full salary. I would like to add. If we SS recipients are not getting a COLA in 2016, neither should Congress. Also, they should give up part of their salary to offset the cut in benefits to people on Disability SS.
Tony S.
Free Disability Insurance Reallocation Tax (DIRT) Act:
To immediately amend the DI tax rate from 1.80% to 2.30%, from 0.90% to 1.15% for employees and from 0.90% to 1.15% for employers under Sec. 201(b)(1)(S) of the Social Security Act 42USC(7)II§401 and amend the OASI tax rate from 10.60% to 10.10%, from 5.30% to 5.05% for employees under 26USC(C)(21)(A)§3101 (a) and from 5.30% to 5.05% for employers under 26USC(C)(21)(A)§3111 (a) to avoid depletion of the Disability Insurance (DI) Trust Fund in 2016 without increasing the overall 12.4% OASDI or 15.3% OASDI and Hospital Insurance (HI) tax-rate under 26USC(A)(2)§1401 beginning October 1, 2015.
To amend the DI tax rate again in 2018 to 2.20% from 2.30%, from 1.15% to 1.10% for employees and from 1.15% to 1.10% for employers under Sec. 201(b)(1)(S) of the Social Security Act 42USC(7)II§401 and amend the OASI tax rate from 10.10% to 10.20%, from 5.05% to 5.10% for employees under 26USC(C)(21)(A)§3101 (a) and from 5.05% to 5.10% for employers under 26USC(C)(21)(A)§3111 (a) without increasing the overall 12.4% OASDI or 15.3% OASDI and Hospital Insurance (HI) tax-rate under 26USC(A)(2)§1401 to maximize efficiency until a deficit appears in the OASI Trust Fund in 2019.
Without Income Limit Law (WILL) Act: To abolish the maximum taxable limit on DI contributions on January 1, 2016 and OASI contributions January 1, 2017 and repeal Adjustment of the contribution and benefit base Section 230 of the Social Security Act 42USC(7)§430. To require the Social Security Administration to pay for SSI Costs beginning January 1, 2017. To share profits in excess of social security program costs to the general fund of the U.S Treasury on a sliding scale beginning year end 2016 DI 50/50 with the USPS, and OASI 10/90 to eliminate the federal budget deficit. In 2020 OASI would share at negotiated rates an estimated 25/75, by 2025 OASDI would share 50/50 and by 2030 OASDI would save to pay for the peak in costs of Baby Boomer generation in 2035 that might raise the overall OASDI tax rate from 12.4%.
P.S. The one year gain mentioned in the blog-posting is an illusion. Two errors have been detected, in the 2014 Annual Report of the OASDI Trustees in OASI Table IV.A.1: (1) the interest rate is not uniform, it fluctuates wildly high, this causes the 1 year retardation and aneurysm phobia. (2) the high and low cost scenarios are confused so that high spending estimates are found in the low-cost projection.
Recalculation of the 2014 Annual Report of the OASDI Trustees http://www.title24uscode.org/Year.htm
Sandra D.
Yes erase the cap! If that can not happen then raise the cap to 800,000. That seems fair
Steven T.
I agree with Joyce if we don’t get a 2016 cola adjustment all politicians should have 25% reductions in salaries& if they don’t we need to post issue on Social Media & not pay our taxes for year 2016 also Social Security needs Reforms, & Restructuring instead of pooling beneficiaries receipient’s benefits every Social Security Applicant should have their own account with every hour they work accounted for/credited with overtime accounted for 1 1/2overtime,doubletime,&tripletime included the way Social Security is Structured now only your ten highest yearly gross earnings are credited for benefits that’s structured totally wrong/inaccurate/improper every hour you work should be credited/accounted for the way Social Security is structured now you work 60 hours per week for 45 years someone else works 25 hours – 40 hours per week for same time period they both get the same amount of monthly benefits?! these politicians are elected for 2-4 year terms after 1 , 2 year term they achieve a pension & free lifetime medical with no copay’s or deductibles & they get paid 10x’s more an hour compared to average middle-class blue collar workers that’s not right.?!
HunterSThompson
Incorrect, it is your highest 35 years. And all you earn is counted. OT Triple OT makes absolute no sense. if you make 30K you make 30K, what is the difference if you made it through OT work, and someone else made 30K straight pay ?
Elise
Absolutely! Remove the “cap” and let everyone who has earned income pay the percentage for Social Security!
Roscoe P.
AMEN! It’s the only way.
Jolene
I agree, erase the cap.
Also, should not pull from the old age insurance to fund the disability.
Liane T.
I have been saying for years that ALL citizens paying into social security should pay in for the entire year. There should be NO cap for the wealthy who, at the present time, do not contribute after the first few months of the year. This is totally unfair to the lower income people who never reach that cap.
dji
well if they repay the funds that means you and i have to pay for them. where do you think the money will come from?
David
Those funds should have never been taken from the SS Fund in the first place. Where can you borrow and not pay it back???
Repay it back from what it was used for when it was borrowed.
Reduce the outrageous spending habits that are practiced. Can you spend money that you don’t have??? If you do it’s called credit, and if you don’t pay that back what happens???
Melodie
Totally agree!
..
David, Any funds that have been “borrowed” from the Social Security Trust Funds have always been paid back in full, plus interest.
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. Investing in (i.e., purchasing of) bonds (including these special issue securities) is always a loan to the party that floats the bond – in this case, the U.S. Treasury. In 2014, the Trust Fund asset reserves earned $98 billion in interest at an effective annual rate of 3.6 percent through investment in these special issue U.S. Government securities.
Please check out our Trust Fund Frequently Asked Questions page for more information.
Arthur
Since when have the IOU’s been paid back ??
Jimbo
A good start will be to end foreign aid to counties who hate us and burn our flag. Then stop all tax payer aid to those in this country illegally. Eliminate Washington lobbyists who are ruing our country. Then term limits for congress. I could go on but you get the picture…..I hope.
Fair4who
Well said indeed, Jimbo! It’s more than time to do what is right!
Also, and perhaps not exactly on the same topic, but like many other responsible citizens I know, I itch for the tax money that goes to those who receive (leach is a better word) without any accountability. How about requiring something in return for the ‘freebies’ handed out to individuals? As an example, a ‘receiving family/individual’ should have their children (or themselves) show tangible academic and social progress in school? Perhaps a certain number of hours of work per week be required at their school, park, or community – like cleaning up, painting, etc. etc.? It would be a win-win . . .
Donald O.
If they did that the funds will be there for our great grandchildren and beyond. They should never have been allowed to touch money that doesn’t belong to anyone but the ones who contribute to SSA.
Jimbo
Amen
marvin g.
god help us
Arthur
I have asked AARP to find out about a LOCK on that account, NO RESPONSE !! 48 million members should know RIGHT ???
JeanAnn N.
Yes, I agree….they stoled our money from the fund during the Bush Administration and haven’t returned it. They had no right to take our money and use it and they certainly have no right to keep it. THEY NEED TO PAY IT BACK NOW.
Arthur
O! you forgot Clinton removed $2.5 BILLION from the account to balance the Government Budget !!!
Richard
Totally agree. We have to pay our own way especially when we borrow money. Why should we be penalized when the Government borrows money. They should be responsible for paying this back themselves. Don’t take it out on us and make us pay for their debts. I feel that the President, Congress, Democrats, Republicans, Senators, All the Politicians, and all the Governors. Should start helping us out, especially, the middle-class, senior citizens, veterans and the homeless, instead of themselves and Government.
Billy T.
Yes, indeed, and stop paying benefits to illegals and other people who have not contributed to the fund
C K.
ditto
Helen
I agree ,the Goverment should pay back ,what they have Borrowed and Quit dipping into Social Security. We aqs seniors have worked and paid into it, The congress does not pay int Social Security.Neither does any one inHouse or congress ,Neither does the President.
Yet they always get a raise.. Quit giving our money away to anyone who has not worked for it.
..
Helen, all members of Congress, the President and Vice President, federal judges and most political appointees, were covered under the Social Security program starting in January 1984. They pay into the system just like everyone else. Furthermore, everyone needs to have 40 credits, or 10 years of work paying into Social Security taxes, to qualify for Social Security. The number of credits needed may vary depending on which Social Security benefit you are applying for.
Keith
Thanks for letting everyone know (again) that members of Congress and the President “DO” pay into Soc Sec. It has been over 30 years now and people still do not know tha!!!
Arthur
BIG DEAL !! one year in office and they retire with full benifits
..
Ron, Any funds that have been “borrowed” from the Social Security Trust Funds have always been paid back in full, plus interest.
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. Investing in (i.e., purchasing of) bonds (including these special issue securities) is always a loan to the party that floats the bond – in this case, the U.S. Treasury. In 2014, the Trust Fund asset reserves earned $98 billion in interest at an effective annual rate of 3.6 percent through investment in these special issue U.S. Government securities.
Please check out our Trust Fund Frequently Asked Questions page for more information.
Arthur
Paid back ?? that’s a LIE !! and NO COLA for 2016 ?? WHY ??
cheyenne
By law and congress by act . I was told i was iven. How
annonimous
I juat want to share a little bit of information informative info. Why are their so many rapists living in neighborhoods either directley beside the victim or in the same exact area as the victim? Georgia is a high rapists state whether they had be trialed and not charged fired and rehired the victim has to always sufder as a victim in public and in private. The victim has to keep an eye on herself and her kid or kids. Alot of rapists claim to be bipolar. Rapists whose had records destroyed deleted expunged and those who change their names to coverup rape assaults like all 50 states, cops, presidents,attornies, cuatomer service reps, mayors, judges all occupations they even change their appearance to act as if they never raped or assaulted or stalked or harrassed or predatored a victim. Victims who doesn’t bother anyone seems to be the most stalked and harrassed. Georgia, Florida and other states are very high crimed rapists states no matter if they had never been jailed for their sexual assault rapes, child molestations and victim stalking.
Susan
Karen, Ron and Jo,
Congress invested part of the SS Trust Fund into Federal guaranteed rate bonds to continue building the value of the SS Trust Fund. As these bonds mature they pay the guaranteed interest rate and the principle back into the SS Trust Fund just as you would receive back if you had invested your own money into these Federal Bonds. The alternative would be to allow the current large surplus in the SS Trust Fund to be eaten away by inflation. That SS Trust Fund buildup began about three decades ago to plan for when the Baby Boomers started retiring.
I can, however, see why there is a perception that Congress “borrowed” from SS. After all, Federal Bonds are how the government finances its debt spending so if you invest in Federal Bonds you are loaning money to the government. Federal Bonds are a very stable way to provide a guaranteed rate of return on your investment. When I think about how I would like Congress to grow the SS Trust Fund, it makes sense to me that they put part of the surplus into very safe guaranteed investments – Federal Bonds. So basically any “borrowing” is regularly being paid back as the bonds mature.
Hope you are having a great weekend. – Susan