Social Security Trust good to 2035

[VanWinkle]

The Social Security Administration released the 2019 report on the Trust fund.

Good til 2035(improved by one year) and will then be able to
pay 80%(about 5% better) of benefits with no changes.

https://www.ssa.gov/news/press/releases/2019/#4-2019-1

VW

 

[Independent]

The large change in the reserve depletion date for the DI Fund is mainly due to continuing favorable trends in the disability program. Disability applications have been declining since 2010, and the number of disabled-worker beneficiaries receiving payments has been falling since 2014.

Data and modeling junkies will enjoy the discussion of all the assumption and methological changes since last year's report.
Table IV.B7 here: https://www.ssa.gov/OACT/TR/2019/IV_B_LRest.html#219298

 

[marko]

The Social Security Administration released the 2019 report on the Trust fund.

Good til 2035(improved by one year) and will then be able to
pay 80%(about 5% better) of benefits with no changes.

https://www.ssa.gov/news/press/releases/2019/#4-2019-1

VW

Not bad for a benefit that was supposed to be totally long gone by the time I was to be eligible (2014)

And I'd expect by 2028, it will be improved out to 2050 or so.

 

[camfused]

Maybe I am misreading it, but I read that the OASI (which is the SS check generator for most/many of us), depletes in 2034, with 77% of benefits. This is the same date, and percentage, as it was last year.

 

[joeea]

“The Trustees recommend that lawmakers address the projected trust fund shortfalls in a timely way in order to phase in necessary changes gradually and give workers and beneficiaries time to adjust to them,” said Nancy A. Berryhill, Acting Commissioner of Social Security.

It's a good recommendation.

 

[Beststash]

It's time to do something about it instead of just talking. We seem to be able to cut taxes without any consideration of the long term effects but ignore our major problems without any thought whatsoever.

 

[camfused]

What they are not allowed to say is: "The Trustees recommend that lawmakers do absolutely nothing until the last minute, if at all, to ensure that they get re-elected, since they would not have raised taxes."

Yet another example for my European/Asian friends where they say "Why doesn't this get fixed, since it is so far away and you know it is coming?", and I just have to shrug my shoulders and say I don't know.

 

[teejayevans]

Yet another example for my European/Asian friends where they say "Why doesn't this get fixed, since it is so far away and you know it is coming?".

Just respond with “because it is so far away”
Politicians are superb at procrastination. That and lying are their super powers.

 

[MichaelB]

The thread was moved to the FIRE Related Public Policy forum.

 

[TNBigfoot]

What they are not allowed to say is: "The Trustees recommend that lawmakers do absolutely nothing until the last minute, if at all, to ensure that they get re-elected, since they would not have raised taxes."

Yet another example for my European/Asian friends where they say "Why doesn't this get fixed, since it is so far away and you know it is coming?", and I just have to shrug my shoulders and say I don't know.

It will not get fixed because politicians fear loosing their re-elections by ticking off segments of the population

 

[joeea]

We seem to be able to cut taxes without any consideration of the long term effects but ignore our major problems without any thought whatsoever.

Go figure.

 

[joeea]

What they are not allowed to say is: "The Trustees recommend that lawmakers do absolutely nothing until the last minute, if at all, to ensure that they get re-elected, since they would not have raised taxes."

Yet another example for my European/Asian friends where they say "Why doesn't this get fixed, since it is so far away and you know it is coming?", and I just have to shrug my shoulders and say I don't know.

It seems like you do indeed know.

 

[joeea]

It will not get fixed because politicians fear loosing their re-elections by ticking off segments of the population

It will get fixed because politicians fear losing their re-elections by ticking off segments of the population.

It just won't get fixed soon.

 

[drunarayan]

SS could become depleted by 2035!

I saw this press release from the SSA today with this ominous statement -

"The Social Security Board of Trustees today released its annual report on the long-term financial status of the Social Security Trust Funds. The combined asset reserves of the Old-Age and Survivors Insurance and Disability Insurance (OASI and DI) Trust Funds are projected to become depleted in 2035, one year later than projected last year, with 80 percent of benefits payable at that time."

One year later - still this cannot be good news! Link below:

https://www.ssa.gov/news/press/releases/2019/#4-2019-1

I redid ny FIRECalc with SS - now projecting @91%. Watch out below ...

 

[pb4uski]

A bit of a sensationalist headline IMO.

Insolvent.... unable to pay debts owed... may technically be correct but many people will ad the headline that there would not be any benefit payments at all... but the reality is that there will be a 20% haircut to benefits paid if no actions are taken.

This is actually an improvement... IIRC last year was 2034 and a 23% haircut.

 

[Jerry1]

I read something that said that SS will stop bringing in more than they are paying out in 2020. This will require that they start tapping the Trust Funds. My thinking is that this means the IOU’s are coming due and this will need to be addressed right away. I mean come on, I don’t think Al Gore got his lock box, so isn’t the money going to come from the general fund and start to contribute to the annual budget deficit? 2035 is just the point where there are no more IOU’s to cash. That doesn’t mean that there won’t be issues long before that. Cashing in the IOU’s will hopefully spur action.

 

[pb4uski]

You have a point. Cashing in the IOUs (making payments from the currently $3T trust fund) will require issuance of more government debt and more interest on the debt in the federal budget.

$3T/(2035-2019) = $188 billion a year on average for 16 years... actually more with interest on the trust fund.... but I'm sure the utilization of the trust fund isn't straight line like that.... lower earlier and higher later I would think.

 

[ShokWaveRider]

It will not get fixed because politicians fear loosing their re-elections by ticking off segments of the population

Maybe that, and the fact that probably the next 1 - 1.5 administrations will consider it NOT their problem! Most policy makers get government pensions anyway. It is far enough ahead where funding their policies is worth more to them than SS for the masses. They earn too much to care and 2035 is a long way away in political years.

As with everything that is important (for the general Citizen Population) they will wait till the 11th hour to do anything at all, and what they do will depend on the political climate of that time.

 

[Teacher Terry]

Federal workers pay into SS so are not affected by WEP.

 

[Crabby Mike]

Federal workers pay into SS so are not affected by WEP.

To add and clarify (and no doubt someone will correct me if I get this wrong):


Policymakers (members of Congress and the like) basically earn the same retirement benefits other Federal workers get, based in time of service and age. The former system (Civil Service Retirement System, or CSRS) was the one that paid a defined benefit pension, and the employees didn't participate in Social Security. The "new" system (Federal Employees Retirement System, or FERS) began in the 1980s, and covered all new employees going forward, with those under CSRS given the option to switch. FERS retirement benefits consist of the Thrift Savings Plan, or TSP (basically a 401K) and a tiny pension, along with the ability to participate in the Federal health insurance program (by paying premiums) in retirement. The majority of CSRS participants have already retired, or will soon.


The frequently-circulated nonsense that members of Congress get lifetime pensions after one term, etc. is just that -- nonsense. The only Federal employee that gets a lifetime salary is the President.

 

[GrayHare]

These are just numbers in a spreadsheet, no? There's no lockbox holding FICA/SS money separately. Incoming FICA is commingled with other money coming into the government. If dollars commingle on the way in, SSA can draw from the same big pile when needed in the future.

 

[gerntz]

Good news is my income taxes will be lower.

 

[USGrant1962]

These are just numbers in a spreadsheet, no? There's no lockbox holding FICA/SS money separately. Incoming FICA is commingled with other money coming into the government. If dollars commingle on the way in, SSA can draw from the same big pile when needed in the future.

Not true. The SS trust fund is in special Treasury securities. The FICA/SS money is as separate as it can be and accounted for to the penny. SS can only draw from those bonds and current SS taxes, and cannot draw from General Revenues.

Now, you could argue that the Government already spent the excess and issued bonds to replace it, but those bonds Treasuries so are quite real as long as the U.S. Government is around.

 

[220volt]

So come 2035 will they immediately cut benefits to all existing retirees, soon-to-be retirees
or
will they start preemptively cutting future benefits of younger generations who haven't earned SS credit yet?

I read it as 20% cuts immediately across the board - existing and future.

 

[Crabby Mike]

So come 2035 will they immediately cut benefits to all existing retirees, soon-to-be retirees

or

will they start preemptively cutting future benefits of younger generations who haven't earned SS credit yet?



I read it as 20% cuts immediately across the board - existing and future.

Yes, the latter -- according to everything I've read, that's how the law reads.