2023 Social Security Trustees Report

[USGrant1962]

The 2023 Trustees Report was issued today.

https://www.ssa.gov/oact/TR/2023/index.html

Bottom line is reserves are depleted a year earlier, still forecasting a 23% shortfall:

The OASI Trust Fund reserves are projected to become depleted in 2033, at which time OASI income would be sufficient to pay 77 percent of OASI scheduled benefits. DI Trust Fund asset reserves are not projected to become depleted during the 75-year period ending in 2097.

 

[Midpack]

I assume Congress will address Soc Sec in 2032, a presidential election year!

As I understand it, Medicare insolvency occurs before Soc Sec. Based on 2022 projections from the Medicare Board of Trustees, the HI trust fund is projected to be depleted in 2028 (edit: now 2031). https://www.kff.org/medicare/issue-brief/faqs-on-medicare-financing-and-trust-fund-solvency/

 

[braumeister]

The 2023 Trustees Report was issued today.

https://www.ssa.gov/oact/TR/2023/index.html

Bottom line is reserves are depleted a year earlier, still forecasting a 23% shortfall:

Woohoo! Ten more years to Blow That Dough!

 

[USGrant1962]

I assume Congress will address Soc Sec in 2032, a presidential election year!

As I understand it, Medicare insolvency occurs before Soc Sec. Based on 2022 projections from the Medicare Board of Trustees, the HI trust fund is projected to be depleted in 2028. https://www.kff.org/medicare/issue-brief/faqs-on-medicare-financing-and-trust-fund-solvency/

Looks like the 2023 Medicare Trustees Report was released also today:
https://www.cms.gov/oact/tr

The insolvency date moved out a few years due to the Inflation Reduction Act.

The expenditure projections reflect the cost-reduction provisions required under current law but not the payment reductions and/or delays that would result from the HI trust fund depletion. In the year of asset depletion, which is projected to be 2031 in this report, HI revenues are projected to cover 89 percent of incurred program costs.

 

[marko]

I'm confused. I thought learned here years ago that there is no "trust fund" for SS and that it's a "money in, money out" sort of scheme. How can there be trustees? Or was I mislead, or, more likely, did I misunderstand?

Either way, I seriously doubt that SS or Medicare will "run out of money". It remains the third rail. If it ever becomes means tested more than it is already, I'm sure the ACA crowd will find a way around that too.

 

[USGrant1962]

I'm confused. I thought learned here years ago that there is no "trust fund" for SS and that it's a "money in, money out" sort of scheme. How can there be trustees? Or was I mislead, or, more likely, did I misunderstand?

Either way, I seriously doubt that SS or Medicare will "run out of money". It remains the third rail. If it ever becomes means tested more than it is already, I'm sure the ACA crowd will find a way around that too.

There have been a trust funds for decades. The SS/OAS one was growing until about 2010, when it started being drawn down.

 

[marko]

There have been a trust funds for decades. The SS/OAS one was growing until about 2010, when it started being drawn down.

Goes to show; you can't believe everything you read on the internet (or this forum!).

 

[Brett_Cameron]

I'm confused. I thought learned here years ago that there is no "trust fund" for SS and that it's a "money in, money out" sort of scheme. How can there be trustees? Or was I mislead, or, more likely, did I misunderstand?

Either way, I seriously doubt that SS or Medicare will "run out of money". It remains the third rail. If it ever becomes means tested more than it is already, I'm sure the ACA crowd will find a way around that too.

There has been a SS Trust Fund from the very beginning of SS in the 1930s. The initial funding of the trust fund was by a special expenditure by Congress. The Trustees were named by governmental position from the very beginning.

 

[Turbo29]

What are the Social Security trust funds, and how are they financed?


There are two Social Security trust funds: old-age and survivors insurance (OASI) and disability insurance (DI), though the two are often analyzed together as Old-Age, Survivors, and Disability Insurance (OASDI). The funds finance benefits for eligible retired and disabled workers and their spouses, dependents, and survivors. When revenue dedicated to financing OASI and DI exceeds program expenses, the surplus is credited to the respective trust funds, which invest in special interest-bearing Treasury bonds. When program costs exceed receipts, the Social Security Administration can redeem its bonds to cover expenses, until it runs out of bonds. The US Department of the Treasury pays its interest obligation to the trust funds from general government funds.

 

[donheff]

As far as I can see the Social Security Trust Fund is essentially us lending our $ to the US Government to spend on other programs like unfunded wars until they (us) can get their (our) sh** together at some future time.

We get an IOU back from our government just like people (and countries) get IOUs from the US government when they buy Treasuries. We actually got our sh** together a couple of time in the past - the Social Security Amendments in 1983 was a pretty big bipartisan deal that bought us decades of solvency. That one was so successful that the Trust Fund surplus was tapped for many wars.

And remember when the budget was actually balanced for a year in the Clinton Admin? It's hard to be optimistic with an intentional default on the debt looming but we can fix it if we try.

 

[donheff]

As far as I can see the Social Security Trust Fund is essentially us lending our $ to the US Government to spend on other programs like unfunded wars until they (us) can get their (our) sh** together at some future time.

We get an IOU back from our government just like people (and countries) get IOUs from the US government when they buy Treasuries. We actually got our sh** together a couple of time in the past - the Social Security Amendments in 1983 was a pretty big bipartisan deal that bought us decades of solvency. That one was so successful that the Trust Fund surplus was tapped for many wars.

And remember when the budget was actually balanced for a year in the Clinton Admin? It's hard to be optimistic with an intentional default on the debt looming but we can fix it if we try.

Edit: I forgot to add that the Trust Fund money was always intended to be lended back to the General Fund to pay ongoing expenses. It would not have been rational to pile up trillions of extra dollars. What went wrong was not borrowing from the Trust Fund but borrowing way, way, way more than that.

 

[Andre1969]

There is a trust fund, but it's invested in some type of special Treasury bonds that pay a few percent interest per year.

People like to say that the trust fund has been raided and that there's nothing there but a bunch of IOUs, but having that money invested is better than just letting it sit in cash and earn nothing.

It's no more of an IOU than an I-bond or any other type of savings bond is.

 

[Car-Guy]

Woohoo! Ten more years to Blow That Dough!

That's probably all I'll need...

 

[FiveDriver]

There was a good article linked from the Oblivious Investor website, that presented ways to fix the SS problem for the next 75 years. The actions outlined in this article would require some gumption to enact, and such fortitude seems to be lacking in Foggy Bottom these days.

Just remember -- any actions taken to help your fellow citizen in their time of need, should not to be considered Socialistic Communist-Marxist Bolshevism.

https://www.morningstar.com/articles/1140581/how-to-balance-social-securitys-books

 

[robls]

In regards to Medicare and Medicaid:
https://market-ticker.org/akcs-www?post=248435
"CMS (Medicare and Medicaid) is one third of the entire Federal Budget. When those programs were put into place the tax rates for Medicare were approximately equal to the percentage of GDP spent on medical care. The medical system then embarked on a multi-decade program of felony anti-competitive practices and neither party has or will stop it, so the percentage went from about 3-4% of GDP to roughly 20% today. The tax rate did not materially change and would have to be multiplied by five to be reasonably coherent which, of course, is politically impossible."