The trust funds the Social Security Administration relies on to pay benefits are now projected to run out in 2035, one year later than previously projected, according to the\u00a0annual trustees\u2019 report\u00a0released on Monday.<\/p>\n
At the projected depletion date, 83% of benefits will be payable if\u00a0Congress does not act sooner\u00a0to prevent that shortfall.<\/p>\n
The Social Security trustees credited the slightly improved outlook to more people contributing to the program amid a strong economy, low unemployment and higher job and wage growth. Last year, the trustees projected the program\u2019s funds would\u00a0last through 2034, when 80% of benefits would be payable.<\/p>\n
\u201cThis year\u2019s report is a measure of good news for the millions of Americans who depend on Social Security, including the roughly 50% of seniors for whom Social Security is the difference between poverty and living in dignity \u2014 any potential benefit reduction event has been pushed off from 2034 to 2035,\u201d Social Security Commissioner Martin O\u2019Malley said in a statement.<\/p>\n
O\u2019Malley, who was\u00a0sworn in\u00a0to lead the agency in December, also urged Congress to extend the trust fund\u2019s solvency \u201cas it did in the past on a bipartisan basis.\u201d<\/p>\n
\u201cEliminating the shortfall will bring peace of mind to Social Security\u2019s 70 million-plus beneficiaries, the 180 million workers and their families who contribute to Social Security, and the entire nation,\u201d O\u2019Malley said.<\/p>\n
Social Security\u2019s new 2035 depletion date applies to its combined trust funds.<\/p>\n
The trust funds help pay for benefits when more money is needed beyond what is coming in through payroll taxes. Currently, 6.2% of workers\u2019 pay is taxed for Social Security, while an additional 1.45% is taxed for Medicare. The total 7.65% is typically matched by employers. High earners may have an additional 0.9% withheld for Medicare.<\/p>\n
While the combined depletion date for Social Security\u2019s trust funds is typically used to gauge the program\u2019s solvency, the funds cannot actually be combined based on current law.<\/p>\n
Social Security\u2019s two trust funds have distinct projected depletion dates.<\/p>\n
The fund used to pay retired workers, their spouses and children, and survivors \u2014 formally known as the Old-Age and Survivors Insurance Trust Fund \u2014 is projected to last until 2033, which is unchanged from last year. At that time, 79% of those scheduled benefits may be payable.<\/p>\n
The fund used to pay disabled benefits \u2014 known as the Disability Insurance Trust Fund \u2014 will be able to pay full benefits until at least 2098, the last year of the projection period.<\/p>\n
Medicare solvency is typically measured by the ability of the trust fund to make up for a shortfall in payroll taxes used to fund Part A hospital insurance.<\/p>\n
The Medicare Hospital Insurance trust fund \u2014 used to fund Part A benefits \u2014 saw the biggest improvement in this year\u2019s trustees report. Its depletion date is now pushed to 2036 \u2014 five years later than was projected last year \u2014 due in part to higher payroll tax income and lower than projected 2023 expenditures.<\/p>\n
At that time, 89% of scheduled benefits may be payable.<\/p>\n
Medicare\u2019s Supplemental Medical Insurance Trust Fund \u2014 which covers voluntary Part B coverage for physician services and medical supplies and Part D prescription drug coverage \u2014 is financed for the indefinite future, since it relies on beneficiary premiums and Treasury Department contributions that are automatically adjusted each year.\u00a0<\/p>\n
While the new projected depletion dates show lawmakers have slightly more wiggle room, experts say the solvency of both Social Security and Medicare should be addressed sooner rather than later.<\/p>\n
For the AARP, the issue is a top concern for members ages 50 and up, said Bill Sweeney, the organization\u2019s senior vice president of government affairs. About 40% of families who are 65 and older rely on Social Security for at least half of their income, and about 20% of families rely on it for all of their income, he said.<\/p>\n
For any\u00a0reductions to be on the horizon\u00a0for Social Security benefits, or for that to even be talked about, is \u201creally scary for people,\u201d Sweeney said.<\/p>\n
\u201cCongress has a responsibility to sit down and work this out in a bipartisan way,\u201d Sweeney said. \u201cAnd the sooner they do it, the better.\u201d<\/p>\n
The new projected depletion dates put Social Security and Medicare on a more similar timeline than previous estimates. That may offer the opportunity for a unified one-step reform for the programs, he suggested.<\/p>\n<\/p>\n
The trust funds the Social Security Administration relies on to pay benefits are now projected to run out in 2035, one year later than previously projected, according to the\u00a0annual trustees\u2019 report\u00a0released on Monday. At the projected depletion date, 83% of benefits will be payable if\u00a0Congress does not act sooner\u00a0to prevent that shortfall. The Social Security […]<\/p>\n","protected":false},"author":0,"featured_media":4049,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-4048","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business"],"_links":{"self":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts\/4048","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/comments?post=4048"}],"version-history":[{"count":0,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts\/4048\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/media\/4049"}],"wp:attachment":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/media?parent=4048"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/categories?post=4048"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/tags?post=4048"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}