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June 02, 2022 at 04:46 PM
What You Need to Know
- The Old-Age and Survivors Insurance Trust Fund is projected to become depleted in 2034.
- The latest report shows an improvement in the financial position of Social Security and Medicare, said Treasury Secretary Janet Yellen.
The combined asset reserves of the Social Security Old-Age and Survivors Insurance Trust Fund, which pays benefits to retirees, are projected to become depleted in 2034, one year later than last year’s estimate, with 77% of benefits payable at that time, according to the just-released Social Security Trustees report.
The Disability Insurance Trust Fund is not projected to run out within the trustees’ 75-year projection period. In 2021, the fund was expected to go bust in 2057.
In its 2022 Annual Report to Congress, the Trustees announced:
- The asset reserves of the combined OASI and DI Trust Funds declined by $56 billion in 2021 to a total of $2.852 trillion.
- The total annual cost of the program is projected to exceed total annual income in 2022 and remain higher throughout the 75-year projection period. Total cost began to be higher than total income in 2021. Social Security’s cost has exceeded its non-interest income since 2010.
- The year when the combined trust fund reserves are projected to become depleted, if Congress does not act before then, is 2035 — one year later than last year’s projection. At that time, there would be sufficient income coming in to pay 80% of scheduled benefits.
Treasury Secretary Janet Yellen said that the “latest report shows an improvement in the financial position of Social Security and Medicare, reflecting the strong economic recovery and growth in the last year. However, in the coming decades it will be vital for Congress to take steps to put Social Security and Medicare on solid financial footing for the long term.”
Kilolo Kijakazi, acting commissioner of Social Security, added that “It is important to strengthen Social Security for future generations. The Trustees recommend that lawmakers address the projected trust fund shortfalls in a timely way in order to phase in necessary changes gradually. Social Security will continue to be a vital part of the lives of 66 million beneficiaries and 182 million workers and their families during 2022.”
