Each year, the Social Security Board of Trustees releases its yearly report on the long-term financial outlook of the Social Security Trust Funds. The report includes projections for when those trust funds will be depleted.
Social Security holds reserves in two trust funds: one for Old-Age and Survivors Insurance, and another for Disability Insurance. Both of these programs are funded by payroll taxes. When tax revenue exceeds benefit payouts, the trust funds grow; when payouts exceed revenues, they shrink.
According to the Board’s recently-released report, the Disability Insurance trust fund is projected to be fully depleted in 2016. At that point, ongoing revenues are projected to pay for just 80 percent of scheduled benefits.
The Old-Age and Survivors Insurance trust fund is in somewhat better shape. It is projected to be depleted in 2033, the report said, at which time revenues will pay 77 percent of benefits.
These figures are based on the government’s best estimates for the variables involved, including economic and population forecasts. Congress will presumably act before allowing programs on which so many Americans depend to suffer such severe budget shortfalls. However, the apparent lack of action on Capitol Hill despite the fact that the disability trust fund’s projected depletion is just three years away is troubling in itself. If the economy’s slow recovery does not pick up or if the sharp recent growth in disability beneficiaries continues, the Board’s estimates might in fact turn out to be optimistic.
At Hook Law Center, we advocate for a robust Social Security system that remains solvent far into the future. Our estate planning attorneys know that your Social Security benefits are a key part of your financial security.
The attorneys at Hook Law Center assist Virginia families with will preparation, trust & estate administration, guardianships and conservatorships, long-term care planning, special needs planning, veterans benefits, and more. To learn more, visit http://www.hooklawcenter.com/ or call 757-399-7506.