Due to a stronger-than-expected economic recovery from the brief pandemic recession in 2020, Social Security will live to see another year before its trust funds go bust, according to the Social Security and Medicare Board of Trustees report.
The report released yesterday also delivered favorable news for Medicare, projecting its depletion date for trust fund for inpatient hospital care to 2028 from last year’s forecast of 2026.
But the report warns that the pandemic is projected to have continuing significant effects on the Old-Age and Survivors Insurance and Disability Insurance (OASI and DI) Trust Funds programs in the near term that could modify the projections in the near term.
For now, though, the combined asset reserves of the OASI and DI Trust Funds are projected to become depleted in 2035, one year later than projected last year, with 80% of benefits payable at that time, the report said.
The report further noted that the OASI Trust Fund reserves are projected to become depleted in 2034, at which time OASI income would be sufficient to pay 77% of OASI scheduled benefits. DI Trust Fund asset reserves are not projected to become depleted during the 75-year period ending in 2096.
The report explained that the while the OASI and DI Trust Funds are often combined “to illustrate the actuarial status of the Social Security program as a basis as OASDI, the two funds are separate entities and therefore the combined fund operations and reserves are hypothetical.” It added that “the combined reserves are projected to decrease from $2,852 billion at the beginning of 2022 to $1,251 billion at the end of 2031, the last year of the short-range period.”
But the combined reserves along with projected program income will be enough to cover projected program cost over the next 10 years under the intermediate assumptions, the report said.
At the end of last year, the report said benefits were paid out to about 65 million people. That included 50 million retired workers and dependents of retired workers, six million survivors of deceased workers, and nine million disabled workers and dependents of disabled workers. An estimated 179 million people had earnings covered by Social Security and paid payroll taxes on those earnings, the report said.
It further noted that total cost of the program in 2021 was $1.145 billion. Total income, it pointed out, was $1.088 billion, which consisted of $1.018 billion in non-interest income and $70 billion in interest earnings.