A new report indicates that the Social Security program is expected to run out of money by 2033 due to slower-than-predicted economic growth.
A Social Security and Medicare Trustees report released March 31 found the entitlement program could face insolvency a year earlier than previously reported, in part, due to a revision of gross domestic product and labor productivity over the coming years. Those benefits, which go to retired workers by in large, impacts about 50 million people per month, with recipients getting an average payment of about $1,800, according to the Social Security Administration.
It added that if no significant changes are made before 2034 to shore up its funds, around 66 million Americans could see a benefit reduction between 23 percent and 25 percent.
“The combined trust funds will be insolvent by 2034, when today’s 56-year-olds reach the full retirement age and today’s youngest retirees turn 73,” the Committee for a Responsible Federal Budget (CRFB) said in an analysis. “Upon insolvency, all beneficiaries will face a 20 percent across-the-board benefit cut.”
And if no action is taken, “all retirees regardless of age, income, or need will face a 20 percent across-the-board benefit cut, which will grow to 26 percent by the end of the 75-year projection window” upon insolvency of the program, the group added.
For years, insolvency has been hovering over Social Security. But some experts have said that recent reports should be no cause for alarm.
“First of all, a year’s worth of fluctuation in the reserve depletion date is not a cause for alarm,” wrote Kathleen Romig, the director of Social Security and disability policy at the Center on Budget and Policy Priorities, on Twitter. She noted that trustees have forecast an insolvency date between 2033 and 2035 for years.
The U.S. Treasury Department and its secretary, Janet Yellen, were among those sounding the alarm about depleted funds, releasing a statement that the trust fund’s “reserves will fall below 20 percent of annual cost by the beginning of calendar year 2033 and will become depleted in 2033 in the absence of legislation to address this imbalance between scheduled benefits and revenue.”
“Social Security will continue to play a critical role in the lives of 67 million beneficiaries and 180 million workers and their families during 2023. With informed discussion, creative thinking, and timely legislative action, Social Security can continue to protect future generations,” Social Security Administration acting commissioner Kilolo Kijazaki added in a statement.
What Happens When 2033 Approaches?
The closer it gets to 2033, the less likely there will be benefit cuts, according to analysts. Benefit reductions typically are phased in slowly for future beneficiaries, so the impact of any cuts would not be adequate to achieve solvency.
“We’ve delayed so long that there are no plausible benefit reductions that can keep the trust fund from running dry in the 2030s,” said Andrew Biggs, a senior fellow at the American Enterprise Institute.
At the point of a 2033 crisis, an emergency injection of new revenue is most likely, said Paul Van de Water, senior fellow at the Center on Budget and Policy Priorities. “Congress could allow the program to continue running deficits by changing the law to credit Social Security with additional income—in effect, it would be financing the program through borrowing.”
That solution would avert the sharp benefit cuts, but it would further fuel public worries about Social Security. A 2020 AARP poll found that 57 percent of respondents are not confident about the future of Social Security, citing a lack of trust in government to keep its promises and that “money is running out.”
Reuters contributed to this report.
A 2020 AARP poll found that 57 percent of respondents are not confident about the future of Social Security, citing a lack of trust in government to keep its promises.
Now, not only are your total Social Security dollar amounts to be cut, but you will be paid back in more worthless deflated in value dollars, and become just another victim of their planned social theft, using planned corrupt inflation to act as their hired robber Biden Commander in chiefs. Social security was supposed to be an investment, and investments are supposed to increase in value, not act as a hidden tax on your American life force. Had I put all the dollars into private investments that government social security forced out of my weekly paychecks over the years,,,,now paying me off with more worthless dollars,,, I would be 4 times richer in retirement by trusting and Self-governing my own retirement plans than allowing corrupt shell game, hide the missing pea, politicians to protect my interests who always only just protect their own interests and that of their party’s. With Socialism you always get the opposite of what they promise. There is no Security in SOCIALISM ergo, none in SOCIAL Security, just like there is no Affordability in the Obama Affordable Care act. Take the name they give the program, and plan on getting the opposite in results. Bet on that, and you can win your own retirement security.
Strange, but I never hear about Welfare, Food Stamps, subsidized housing, “free” school lunches all year round, etc., etc., running out of money. And what about the millions of illegal aliens pouring over the borders, North AND South who have no education or skills, don’t speak our language or share our customs or values getting every “free” ride know to man??
They always go after whatever WORKING U. S. citizens have paid into the system.
“Entitlements”? You bet your butts we’re “entitled” to it after paying into for all of our WORKING lives.
Nor do we hear that the Gov retirement plans are being reduced or pay and spending responsibility. The money alone sent to Ukraine could help SS etc. Plus I never hear that Congress is repaying The SS Funds with all their borrowing out of the fund, starting way back with Vietnam and Johnson. Have to fund the war, don’t you know. I think that was the start of their control and calling the fund entitlements. We trusted the government to keep their sticky fingers out of that fund, my employer and my paycheck were by law placed in the trust, it was our folly to ever had trust in gov.
THat’s because THEY WILL NEVER CUT Welfare, wic etc.. THAT IS THEIR VOTER base.
You won;t hear about the current money wasting libtard givewaways running out of money because they are silently being paid for in debt created as IOUs against the future funding of your depleting government co-mingled social security accounts. There is no money in the Federal banks guaranteeing it, just IOUs of debt backed by the full faith and integrity of the American taxpayer whose collective personl integrity is being socially and secularly assulted on all moral fronts, which by the time you retire, no Chrstian honest values will be left to gurantee a culture of faith that they now insist will preserve it. Charles Ponzi, founder of the Ponzi Scheme would be proud of them.
Especially since they’ve NEVER PAID INTO SS, like we americans have.