Saul Loeb | Afp | Getty Images
At that time, 77% of those benefits will be payable, according to the report.
Social Security’s combined trust funds — the Old-Age and Survivors Insurance and Disability Insurance trust funds — will have enough revenue to pay scheduled benefits and administrative costs until 2034, according to the report. That is one year earlier than projected last year.
At that time, 81% of the combined benefits will be payable, according to the new projection.
While the combined depletion date is used to gauge the Social Security’s solvency, current law prohibits joining those funds.
More from Personal Finance:
Senate version of ‘big beautiful ‘ bill calls for $6,000 senior ‘bonus’
‘SALT’ deduction in limbo as Senate Republicans unveil tax plan
How Senate GOP ‘no tax on tips’ proposal differs from House plan
Medicare’s Hospital Insurance trust fund, which is associated with Medicare Part A and pays for certain health care services, will be able to pay full benefits until 2033, according to the Medicare trustees’ report that was also released on Wednesday. That is three years earlier than projected last year.
At that time, 89% of benefits will be payable.
Congress ‘must act’ to protect program
Approximately 70 million people will receive Social Security benefits this year, while 185 million individuals work and contribute to the program through payroll taxes, Social Security Administration Commissioner Frank Bisignano said in a statement.
The financial status of the trust funds is a “top priority” for the Trump administration, Bisignano said. He also called on Congress to “protect and strengthen” the trust funds for the millions of Americans who will rely on the program “now and in the future.”
Advocates for Social Security beneficiaries likewise called for lawmakers to address Social Security’s looming funding shortfall.
“Congress must act to protect and strengthen the Social Security that Americans have earned and paid into throughout their working lives,” AARP CEO Myechia Minter-Jordan said in a statement following the release of the report.
Minter-Jordan said that “as America’s population ages, the stability of this vital program only becomes more important.”
Social Security’s trust funds help pay for benefits when more money is needed in addition to ongoing revenue from payroll taxes.
Workers currently contribute 6.2% of their pay toward Social Security and 1.45% toward Medicare. Employers typically match those taxes. However, self-employed workers pay a 15.3% tax rate.
To shore up Social Security and Medicare’s trust funds, Congress may raise taxes, cut benefits or a combination of both.
This is a developing story. Please refresh for updates.
Leave a Reply