Social Security has a large and growing surplus and eligible Americans will continue to receive benefits for decades to come.
So says a projection by the Strengthen Social Security Campaign of what the 2012 Social Security Trustees Report, which is due out on April 23, will reveal.
According to the Campaign—which is co-chaired by Nancy Altman, a former assistant to Alan Greenspan’s bipartisan commission whose recommendations formed the basis of the Social Security Amendments of 1983—with “modest legislated increases in revenue,” eligible Americans can count on receiving Social Security benefits “for the next century and beyond.”
How could this be, when repeated reports have said Social Security suffers a cash shortfall and benefits will eventually be cut? According to the Campaign, last year’s trustee report projected that by the end of 2011, Social Security would have an accumulated surplus of about $2.7 trillion, which it now has. This year’s report, the group says, will show that the surplus will be even higher by the end of 2012.
“Because this year’s cost of living adjustment was higher than projected in last year’s report, average wage growth was lower, and the economic recovery has been slower, this year’s report is likely to project that the number of years that Social Security can continue to pay benefits in full with no congressional action will be a year or two shorter, but still decades away,” the Campaign says.
The precise year of when Social Security would stop paying benefits has fluctuated in virtually every trustees report, sometimes projecting a later date, sometimes sooner, the Campaign says. “The fluctuation in the exact years is unsurprising given the uncertainties with projecting inflation, wage growth, productivity, immigration rates, fertility rates, and other factors so far into the future.”
Altman told AdvisorOne that while the trustee reports “don’t vary much from year to year, as they are projecting out 75 years, the projections for this year won’t be quite as favorable as they were last year.”