As Social Security’s funds face insolvency, experts say these are key factors to watch

According to a recent report by the Social Security trustees, the outlook for the program has slightly improved.

Combined trust funds are now projected to run out in 2035, a year later than previously anticipated.

This improvement is primarily attributed to a stronger economy and increased labor productivity.

However, experts emphasize that the need for reform remains imminent.

The trustees’ report highlights several key points: 1.

Retirement fund depletion: The depletion date for the fund used to pay retirement benefits remains 2033.

This means that in nine years, only 79% of benefits will be payable unless Congress acts to prevent benefit cuts.

2.

Disability fund: The trust fund used to pay disability benefits is projected to remain solvent through 2098.

However, economists caution that economic downturns could affect its stability.

3.

Declining birth rate: The trustees have revised the projected birth rate to 1.9 children per woman, which may impact long-term program solvency.

4.

Immigration: Immigration can potentially boost the program by increasing the number of taxpayers.

Both legal and illegal immigration can benefit the program through payroll taxes.

5.

Dramatic changes needed: As Congress delays addressing Social Security issues, the necessary solutions become more severe.

Raising the retirement age or eliminating the taxable earnings threshold may now be required.

Despite the slight improvement, experts agree that the outlook for Social Security underscores the need for congressional action.

Failure to act may result in benefit cuts or substantial program changes.

Voters are urged to ask candidates their stance on Social Security reform to ensure the continuation and improvement of this vital program.