The main Social Security trust funds did better in 2016 than in 2015, but they’re still on track to run dry in 2034, according to the fund trustees.
The Social Security Administration uses two main trust funds to supply benefits: a retirement benefits trust fund, called the Old-Age and Survivors Insurance fund, and Disability Insurance Trust fund.
Together, the funds produced a $35 billion gain in 2016 on $957.5 billion in revenue, compared with a $23 billion gain on $920 billion in revenue for 2015.
The trustees predict the retirement and Social Security Disability Insurance trust funds will run dry in 2034, partly because of a combination of high benefits payments and weak interest income on bond holdings. The trustees are providing the same depletion date projection this year that they were providing a year ago.
If the trust funds really do run dry in 2034, then the Social Security Administration will have enough current revenue to pay about 77% of the benefits promised, the trustees estimate.
On paper, it looks as if the disability trust fund experienced a big gain in revenue in 2016 and the retirement benefits trust fund experienced a small drop in revenue. That’s because Congress prevented the disability trust fund from becoming insolvent in 2017 by shifting some retirement benefits fund revenue to the disability fund, the trustees say. The revenue transfer cut the retirement benefits fund’s reported revenue and increased the reported revenue of the disability fund.
The trustees also provide long-range program projections. The longest-range projections in the current report extend to 2105.
The United States will generate about $19 trillion in “gross domestic product,” or revenue, this year, and the U.S. federal government will spend a total of about $4 trillion. Social Security retirement and disability program revenue amounted to about 5% of U.S. gross domestic product in 2016.
The Social Security trust fund trustees have posted copies of the latest trust fund report and related documents here.
— Read: Medicare Trustees Look Ahead to the Year 2090 on ThinkAdvisor.