Social Security Trustees Warn of Impending Depletion Without Congressional Action
According to the Social Security Board of Trustees, the total annual cost of the federal benefits program is projected to exceed total annual income in 2018 for the first time since 1982, and remain higher throughout the 75-year projection period.
The Social Security Board of Trustees this week released its annual report on the long-term financial stability of the Social Security trust funds, finding the combined asset reserves of the Old-Age and Survivors Insurance and Disability Insurance Trust Funds are projected to become depleted in 2034, the same as projected last year, with 79% of benefits payable at that time.
According to the report, looking specifically at the Old-Age and Survivors Insurance (OASI) Trust Fund, this is projected to become depleted in late 2034, as compared to last year’s estimate of early 2035, with 77% of benefits payable at that time. The Disability Insurance Trust Fund will become depleted in 2032, extended from last year’s estimate of 2028, with 96% of benefits still payable.
In the 2018 annual report to Congress, the Trustees announce the asset reserves of the combined Trust Funds increased by $44 billion in 2017, reaching a total of $2.89 trillion.
“The total annual cost of the program is projected to exceed total annual income in 2018 for the first time since 1982, and remain higher throughout the 75-year projection period,” the report states. “As a result, asset reserves are expected to decline during 2018. Social Security’s cost has exceeded its non-interest income since 2010.”
“The Trustees’ projected depletion date of the combined Social Security Trust Funds has not changed, and slightly more than three-fourths of benefits would still be payable after depletion,” explains Nancy Berryhill, Acting Commissioner of Social Security. “But the fact remains that Congress can keep Social Security strong by taking action to ensure the future of the program.”
Breaking down the $997 billion that flowed into the combined trust funds in 2017, the report shows $874 billion came from net payroll tax contributions, $38 billion from taxation of benefits, and $85 billion from interest payments. Total expenditures from the combined trust funds amounted to more than $952 billion in 2017. Out of this number, Social Security paid benefits of more than $941 billion in calendar year 2017, and there were about 62 million beneficiaries.
Other findings show, during 2017, an estimated 174 million people had earnings covered by Social Security and paid payroll taxes. At the same time, the cost of $6.5 billion to administer the Social Security program in 2017 “was a very low 0.7 percent of total expenditures.”
The full 2018 Trustees Report is available here.
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