Social security trustees project fund shortfall in 2035

The trust funds from which Social Security benefits are paid are projected to run short of money by 2035, one year later than estimated last year by the Social Security Board of Trustees.

The trustees’ 2024 annual report, released May 6, cites low unemployment and strong wage growth as factors in the slightly rosier outlook for Social Security. The program primarily relies on

payroll taxes paid by almost all U.S. workers to fund benefits for 67 million older Americans, people with disabilities and members of their families. Social Security is still paying out

more each year to recipients than it collects in revenue, reducing cash reserves that were just shy of $2.8 trillion at the end of 2023. Unless Congress takes action to shore up the

program’s finances, the reserve will be used up by 2035 and the program will be able to pay only 83 percent of scheduled benefits, the Trustees estimate. That, too, marks a modest

improvement from last year’s report, which projected an 80 percent payout rate when the trust funds run short. For the third straight year, Medicare’s trustees forecast a stronger financial

footing for the government health care program. Medicare’s main trust fund, covering hospital insurance, will be able to pay full benefits through 2036 — five years later than the trustees

projected last year and eight years later than their 2022 estimate. “While there was good news today in the trustees' reports, older Americans need certainty that Medicare and Social

Security will be protected," Jo Ann Jenkins, CEO of AARP, said in a May  6 statement. "For long-term sustainability, Congress owes it to the American people to reach a bipartisan

solution, ensuring people’s hard-earned Social Security benefits will be there in full for the decades ahead. The stakes are simply too high to do nothing.” 'NO TIME TO SPARE' The

report assesses Social Security’s fiscal health over the next 75 years, based on economic and actuarial trends that shape how much the program collects in taxes and other revenue and how

much it pays out in retirement, survivor, family and disability benefits. For decades after Congress passed a bipartisan reform of Social Security’s financial structure in 1983, the program

built up reserves as revenue growth outpaced costs. But the balance has shifted in recent years with birth rates declining and retirees growing dramatically in number (and, often, living

longer), meaning fewer workers paying into the system for each recipient drawing benefits.