Recent projections from the Congressional Budget Office (CBO) serve as a stark reminder of the challenges facing Social Security. The Old-Age and Survivors Insurance (OASI) Trust Fund is set to deplete by the end of fiscal year 2033, while the Disability Insurance (DI) Trust Fund will exhaust itself by 2064. Combined, these funds could be entirely depleted by 2034—an alarming possibility that could impact millions of Americans.
If these trust funds become exhausted, Social Security will only be able to pay benefits based on current tax revenues. This could lead to significant reductions in benefits, with projections suggesting a potential 23% cut in retirement benefits starting in 2033. For those who have dedicated their lives to work, this poses a serious threat to financial security in their later years.
Lawmakers will face mounting pressure to address this looming crisis, and the solutions will not be easy. Options may include raising the retirement age, adjusting benefit calculations, or altering the funding structure of Social Security. Each of these decisions carries major implications for millions, potentially creating hardships for current and future retirees.
Sources:
Over $70 Trillion in Unfunded Obligations
Over the next 75 years, US taxpayers face $73.2 trillion in long-term unfunded obligations.
Current policy is unsustainable as debt would exceed 500% of GDP by 2098, per Cato Institute.
These unfunded obligations are driven by two… pic.twitter.com/Tk2OOaQrMb
— Reef Insights (@ReefInsights) August 30, 2024