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December 18, 2013 at 10:17 AM
The Social Security Administration will run an annual deficit averaging 12% over the next decade and the funding gap will grow as more baby boomers retire, according to an analysis by the Congressional Budget Office.
For fiscal 2013, Social Security spending totaled $808 billion, representing about a quarter of all federal spending. Revenue added to the Social Security system in 2013 was $745 billion. The system makes payments to 58 million people, about 70% of them retirees or their spouses and children.
The Social Security deficit will rise to more than 30% by 2030, according to the CBO forecast, as more baby boomers retire, increasing benefits payments as a share of the economy.
At the same time, tax collections as a share of the economy will remain constant. About 96% of Social Security’s money comes from payroll taxes. The rest comes from taxes paid by those receiving benefits once they reach a certain income level.
