The program is now running out of money. Social Security's benefit payments have exceeded program revenue each year since 2021, and the annual shortfall is projected to reach $100 billion this year.
When will Social Security run out? According to the May 2024 Social Security trustees report, the fund reserves that help pay for Social Security benefits will be depleted in 2035. Without congressional intervention, retirees would then only be able to receive 83% of their full benefits.
The current structure of Social Security is causing funds to deplete much faster than expected due to a declining workforce (De Rugy, 2012). While there is not much focus on solutions currently, options to slow down this depletion are available.
More than three-quarters of current retirees are reliant on Social Security to pay necessary expenses, Bankrate found. A scary deadline is looming for a lot of Americans: The Social Security trust fund is projected to be exhausted in 2033.
Falling birth rates: The birth rate for U.S. women back in 1960 was 3.7. That number fell to 1.7 by 2022. This means fewer workers have replaced the retiring baby boomers in paying Social Security taxes, leading to less income for a program that's paying benefits to an increasing number of seniors.
Introduction. As a result of changes to Social Security enacted in 1983, benefits are now expected to be payable in full on a timely basis until 2037, when the trust fund reserves are projected to become exhausted.
No Control Over Returns: Individuals have no control over the benefit formula or how their contributions are used. In fact, amounts collected from each individual are not invested and are not used to pay future benefits to them. Amounts collected today are used to pay benefits to current retirees and beneficiaries.
In the proposals presented to the Commission, the use of retirement bonds--and annuities based on bond accumulations- would also replace the entire benefit structure of Social Security for the future.
However, without reform, the Social Security Trust Funds will soon be depleted and unable to pay full benefits. According to CBO's projections: The Old-Age and Survivors Insurance (OASI) Trust Fund, which provides benefits for retired workers and their families as well as deceased workers, will be depleted in 2033.
If your spouse dies, do you get both Social Security benefits? You cannot claim your deceased spouse's benefits in addition to your own retirement benefits. Social Security only will pay one—survivor or retirement. If you qualify for both survivor and retirement benefits, you will receive whichever amount is higher.
Bush 'borrowed' $1.37 trillion of Social Security surplus revenue to pay for his tax cuts for the rich and his war in Iraq and never paid it back”.
Fewer workers are left to contribute toward the benefits of each retiree as Baby Boomers retire and the U.S. population ages. Social Security's retirement benefits trust fund is projected to deplete reserves in 2033, leaving it reliant on tax receipts covering 79% of scheduled benefits.
Reduced Benefits
If no changes are made before the fund runs out, the most likely result will be a reduction in the benefits that are paid out. If the only funds available to Social Security in 2033 are the current wage taxes being paid in, the administration would still be able to pay around 75% of promised benefits.
On December 20, 2024, the Senate voted to pass the bill 76-20. This bipartisan legislation would eliminate the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO). Together, these provisions negatively impact or eliminate Social Security benefits for millions of retired public servants.
The cause of the shortfall is simple: The number of people claiming benefits is rising, while the income from working-age people contributing to Social Security via payroll taxes is projected to stay relatively flat.
Policymakers could reduce program costs by changing eligibility and benefit amounts. These changes could reduce current or future benefit amounts for everyone or for certain groups. Improving finances by increasing program revenues. Benefits are largely financed through Social Security payroll tax revenues.
Social Security's current dilemma is that it is inflexible in meeting national priorities, whether they be combating terrorism or addressing the needs of children and the oldest and poorest among the elderly themselves.
Your Social Security benefit might be reduced if you get a pension from an employer who wasn't required to withhold Social Security taxes. This reduction is called the “Windfall Elimination Provision” (WEP). It most commonly affects government work or work in other countries.
On December 21, 2024, the Senate passed H.R. 82, the Social Security Fairness Act of 2023, without amendment, by Yea-Nay vote, 76-20. The bill previously passed the House on November 12, 2024 by roll call vote, 327-75-1, under suspension of the rules.
Elderly individuals who are unable to turn to family for financial support and have no money can become a ward of the state. This may be the case if the senior develops a health emergency and is no longer able to live alone.
Ninety-five percent of never-beneficiaries are individuals whose earnings histories are insufficient to qualify for benefits. Late-arriving immigrants and infrequent workers comprise the vast majority of these insufficient earners.
According to the Social Security Administration, or SSA, the monthly retirement benefit for Social Security recipients is currently $1,783.55 in 2024 on average. Several factors can drag that average up or down, but you have the most control over the biggest variable of all — the age that you decide to cash in.