Social Security Solvency Slides

The latest annual report from the Trustees of Social Security and Medicare is published, and it’s not positive. Because the economy and tax revenue have been lower than forecast, the trustee are forecasting the fund will “run out of money” in 2034, two years earlier than the previous forecast. These forecasts fluctuate like this from year to year, but the crunch time is always within a few years. Here’s a summary.

It’s important to note that when the fund runs out of money, that doesn’t mean benefits won’t be paid. The trustees make clear that even after the reserves accumulated in the past are gone, the annual tax revenue into the system will be enough to pay 70% to 75% of promised benefits.

Among the elderly, 53 percent of married couples get more than half their income from the program. For the unmarried elderly, it’s even more critical: Some 74 percent get more than half their income, and 47 percent get more than 90 percent of their income from the program.

Any move to scale back the program (let alone eliminate it) would come as Americans become increasingly dependent on it to survive. The disappearance of defined-benefit pensions and the inadequacy and unreliability of 401(k) accounts, mean that more retirees, not fewer, are likely to need Social Security in the coming years.