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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Stephen
Many old folk and I am now a member of that clan fought the ACA tooth and toenail. But that reform extended Medicare over a decade before it ran out of money. Now I find out it has helped push the Social Security trust fund depletion date farther out. Certain elements of Congress want to allow the disability fund to run out of money even though there is money for it in the retirement fund ,so they can take a chainsaw to all of Social Security, Past congresses have shifted money around to preserve the whole program. This current congress is very hostile to this program. The radical right has never given up on destroying this program. Even though it is worker funded. Guys wake up, research , use reason and disregard the endless misinformation. Then vote wisely for your government leaders. Other wise yours and future retirements will be a whole lot less rosy.
JustaMom
Regarding disability benefits. I know someone who has a bad back and is on SS DI. From outward appearances, he looks extremely fit. He works out carefully to keep his core strengthened which helps his back. Most of the time, he knows his limits. Ibuprofen at 800 mg each night so he can get out of bed in the morning. However, when doing ordinary tasks or no, he suffers “flares” and can be bed bound in extreme pain or unable to use his legs to walk. Handrails on either side of his stairway have offered some assist after losing control of his legs and falling down the stairs. Appearances can be very deceiving for someone who is disabled. You don’t know the whole story.
Stephen
I have two brothers with bad backs and are in such chronic pain they are on oxycodone. That stuff is highly addictive. If you friend can stay on Ibuprofen , tell him to do so. Thank God my back is still ok. But knowing the family weakness I am very careful not to hurt it. And yes they are , were (one is decease) disable.
lou s.
i agree with that. i have a disability tag for my car because i had back surgery, and when it flares up i can barely walk so i park in handicap space to get into the grocery store. dont judge me because i dont have a wheelchair.
Mr C.
I also do not agree with my money being taxed twice. It is true all earned wages are taxed, then years later our “benifits” are taxed again when disbursed..
Stephen
85% of my and wife Social Security benefit will be taxed. The one thing that makes it somewhat palatable is that tax money goes back into the Social Security fund to help shore it up. If it went into the general fund helping support tax cuts for millionaires and billionaires I would be livid. Those suckers want a flat tax. Why not take the income limit off of Fica tax and make it a true flat tax.?
Mr C.
I agree on raiseing the cap. Seems logical and would have minimal impact on those effected, but maximum for hose in need, verses any cuts.
David
I would agree that a lot of those who make comments are talking out of their behind and never bothered to get the facts straight. However, I would agree that those who paid into the fund should expect to receive money from the fund and I would venture to guess that, based upon my own experience, you will generally receive more than you actually paid into the fund (with the exception of those who die before collecting or early into collecting w/o survivor benefits).
Looking at all of the other issues that the government has responded to recently (God, Prayer, Flags, Pledge of Allegiance, Our Constitution, etc.) We should all agree to take more from us in taxes, reduce benefits to the retirees, and support the wealthy because they seem to do whatever the smaller percentage of people desire or request.
If 85% of the people are against the issue and only 15% are requesting it be done, they do it ! ! !
What do we expect… it seems that our presidential elections seem to go the same way.
Armand S.
Why would you cut benefits. Some people have to live on this income.
The current cap to tax wages is now at about $110,000.
Why not raise the cap or just get rid of the cap. Just raising the cap would solve the problem but than the democrats would be raising taxes on their big donors etc as would Republicans.
Its an easy solution. I didnt work all my life to have my benefits cut right before I am getting ready to start collecting.
Jim
Lying politicians..from both worthless parties…stole the money to pay for their pork projects and wars.That in itself is the main reason they squeal about ending SS and Medicare,along with VA benefits us Vietnam vets get,because they won’t pay the IOU’s they put in place of the money they used. This country is really ****** and unless Americans stop electing,and re-electing these crooks,we will go the way that Greece has.It’s YOUR choice people.
David
Why would they care???
The politicians don’t pay into the fund nor do they need to rely on the fund for their pensions. The same as healthcare, they have their own plans and do not need to rely on what they create/design for the rest of us. I say if is as good as you want us to believe, then why aren’t you all part of it???
Why would you need a different plan???
PAY BACK the money BORROWED by taking the money from your less critical program spending and ELIMINATE the CAP on paying into the fund. Most of those at that level wont complain.
That should solve the problem!!!
Linda
I agree they take take take and never replace and you and I are paying for their retirement plans and healthcare! They want to cut ours? They need to cut theirs too then! And payback what they stole!
Remove the cap! We need to get the fat lazy cats out of congress!
Frederick A.
The social security “Trust Fund” was never a proper trust and as such was never managed in a fiduciary manor for the benefit of those contributing to it. It was set up as a Treasury account and the funds were available to government agencies from the start. Our government has just become less and less ethical in regard to the management and use of our coerced savings over time. I guess we can consider ourselves lucky that there is any money at all in the account.
Rayburn
I agree wit most of what I’ve read here. The best solution I can see is 1st Pay back what has been borrowed and pass laws making it illegal to borrow from ss in the future. 2nd remove the cap on ss tax for high earners.
Todd
So because I am not disabled and worked since I was 14 I should forfeit my SS which I have paid all my life. Ok let’s say u put money in a bank, the bank says hey you make too much we are going to take your money and give it to someone else. There are people who need help and I think we do help however I know people on so called disability that appear healthier than me?
Rayburn
If they are on disability there is a reason, maybe you do not know as much about their health as you think you do. If they are not disabled they will get caught doing something within a year or two and they will loose their benefits plus have to pay back all they received.
HunterSThompson
or possibly a mental illness. You are away we don’t just lock “them” away anymore in Pennhurst Asylum right ? They are allowed to live their lives, and can be quite healthy.