- ORIGINAL NEWS
Social Security now expected to run short on funds in 2035, one year later than previously projected, Treasury says
- SUMMARY
The annual trustees’ report has revised the projected depletion date for Social Security’s trust funds to 2035, one year later than last year’s projection.
While this is a slight improvement, experts emphasize the need for urgent action by Congress to prevent a looming shortfall.
The improved outlook is attributed to increased contributions due to a strong economy, low unemployment, and higher wage growth.
Currently, 83% of promised benefits could be paid if Congress fails to rectify the issue before the projected depletion date.
Social Security’s two trust funds face distinct projected depletion dates.
The fund for retired workers, spouses, and survivors is projected to run out in 2033, unchanged from last year.
The fund for disability benefits, however, is solvent until at least 2098.
Medicare’s Hospital Insurance trust fund, which covers Part A hospital insurance, has seen a significant improvement in this year’s report.
Its depletion date is now projected for 2036, five years later than previously projected, thanks to higher payroll tax income and lower expenditures.
Despite these slightly improved projections, experts and organizations like AARP stress the importance of addressing the solvency of Social Security and Medicare promptly.
Many seniors rely heavily on these programs for their financial and healthcare security.
Prospective changes to ensure the programs’ long-term viability may include tax increases, benefit adjustments, or a combination of both.
However, bipartisan action is essential, and Congress has yet to find a legislative solution.
- NEWS SENTIMENT CHECK
- Overall sentiment:
neutral
Positive
“The trust funds the Social Security Administration relies on to pay benefits are now projected to run out in 2035, one year later than previously projected, according to the annual trustees’ report released Monday.”
“Medicare solvency is typically measured by the ability of the trust fund to make up for a shortfall in payroll taxes used to fund Part A hospital insurance.”
Negative
“Social Security’s new 2035 depletion date applies to its combined trust funds.”
“While the combined depletion date for Social Security’s trust funds is typically used to gauge the program’s solvency, the funds cannot actually be combined based on current law.”