Social Security will be out of money in 16 years

Social Security's trustees moved up their forecast for the program becoming insolvent to 2034, a year earlier than they had projected last year.
By Rick Docksai | Aug 21, 2018
Social Security's future isn't very secure, according to the latest annual trustees' report, which warns that the program is likely to be insolvent by 2034. According to the report, the numbers of aging Americans receiving benefits are growing too quickly while the U.S. economy is growing too slowlytwo trends that, put together, will lead to surging deficits on the horizon for the 84-year-old social insurance program.

Last year's report had forecast insolvency occurring in 2035. This year's earlier forecast comes while the report notes that this year, the program's payouts to beneficiaries will exceed its incoming revenues by $1.7 billion. This is the program's first net cash outflow in 36 years, according to the report.

The trustees are not predicting that Social Security will run out of money completelythey project that payroll taxes will be enough to keep paying around 75% of the expected benefits to its recipients. But they anticipate that the program's funds will be too depleted to pay out the remaining 25%, leaving beneficiaries everywhere stuck with significantly reduced Social Security income.

Congress will either have to approve a massive increase in funding for the program by 2034 to keep the benefits going at their current rates, while working adults will have to pay more Social Security taxes, according to the report.

Many working Americans are increasingly worried about their own future Social Security benefits. In a recent survey by the Transamerica Center for Retirement Studies (TCRS), 80% of millennial respondents said that they fear that there will be no Social Security available for them by the time they retire.

"Most workers are counting on Social Security as a meaningful source of income in retirementand most are concerned about its future," said Catherine Collinson, CEO and president of Transamerica Institute and TCRS, in apress release.

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