Social Security COLA Set at 5.9% for 2022

In other words: A Social Security benefit that grew to $1,262.40 per month in 2021 from $816 in 2000 should have grown to $1,671 to keep up with rising costs, according to the advocacy group.

Meanwhile, the Social Security Old-Age and Survivors Insurance Trust Fund is on track to be depleted by 2033, a year earlier than estimated in 2020, with 76% of benefits payable at that time, according to the 2021 Social Security Board of Trustees’ report, released in late August.

The Disability Insurance Trust Fund, meanwhile, was projected to be able to pay scheduled benefits until 2057, eight years earlier than last year’s projection. At that time, the report states, the fund’s reserves will be depleted and continuing tax income will be able to pay 91% of scheduled benefits.

Despite the Social Security trust fund’s reserves at the end of 2020 being $2.9 trillion, having increased by $11 billion, there were a variety of factors driving the estimate, the Trustees state.

The report notes that both Social Security and Medicare will face long-term financing shortfalls under “currently scheduled benefits and financing.” Further, both will experience substantial cost growth into the 2030s due to “rapid population aging.”

The finances of both programs have been “significantly affected by the pandemic and the recession of 2020,” the report states. “Employment, earnings, interest rates, and GDP dropped substantially in the second calendar quarter of 2020 and are assumed to rise gradually thereafter toward full recovery by 2023, with level of worker productivity and thus GDP assumed to be permanently lowered by 1 percent even as they are projected to resume their pre-pandemic trajectories.”

The Trustees also noted that elevated mortality rates related to the pandemic through 2023, as well as reductions in immigration and childbearing in 2021-2022 from projected levels in the 2020 report, all affected the projections.