Americans’ Social Security checks will get a lot smaller in 2034 if lawmakers don’t act to address the pending shortfall, according to an annual report released Friday by the Social Security trustees.
That’s because the combined Social Security trust funds – which help support payouts for the elderly, survivors and disabled – are projected to run dry that year. At that time, the funds’ reserves will be depleted, and the program’s continuing income will only cover 80% of benefits owed.
The estimate is one year earlier than the trustees projected last year. About 66 million Americans received Social Security benefits in 2022.
Medicare, meanwhile, is in a more critical financial condition. Its hospital insurance trust fund, known as Medicare Part A, will only be able to pay scheduled benefits in full until 2031, according to its trustees’ annual report, which was also released Friday.
At that time, Medicare, which covered 65 million senior citizens and people with disabilities in 2022, will only be able to cover 89% of total scheduled benefits. Last year, Medicare’s trustees projected that the hospital trust fund’s reserves would be depleted in 2028.
Immensely popular but long troubled, Social Security and Medicare are on shaky financial ground in large part because of the aging of the American population. Fewer workers are paying into the program and supporting the ballooning number of beneficiaries, who are also living longer. Also, health care is becoming increasingly expensive.
Social Security has two trust funds – one for retirees and survivors and another for Americans with disabilities.
Looking at them separately, the Old-Age and Survivors Insurance Trust Fund is projected to run dry in 2033, at which time Social Security could pay only 77% of benefits, primarily using income from payroll taxes. The date…
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