Benefits

Social Security Faring No Better in 2017

In order to extend the life of the Social Security funds past 2034, Congress needs to act, the Social Security Board of Trustees said.

By Lee Barney editors@plansponsor.com | July 14, 2017

The Social Security Board of Trustees announced the financial status of the Social Security Trust Funds.

The combined asset reserves of the Old-Age and Survivors Insurance and Disability Insurance Trust Funds are projected to become depleted by 2034, the same as last year, with 77% of benefits payable at that time. The Disability Industry Trust Fund is projected to become depleted in 2028, extended by five years from last year’s estimate of 2023, with 93% of benefits payable.

The Board also announced that the asset reserves of the Old-Age and Survivors Insurance and Disability Insurance Trust Funds increased by $35 billion in 2016, for a total of $2.85 trillion. The Board expects that the reserves will continue to grow through 2021. However, beginning in 2022, the cost of the program is expected to exceed income.

In order to extend the life of the Social Security funds past 2034, Congress needs to act, the Board said.

“It is important for the public to engage in the important national conversation about how to keep Social Security strong,” says Nancy Berryhill, acting commissioner of Social Security. “People understand the value of their earned Social Security benefits and the importance of keeping the program secure for the future.”

The report also noted that total income, including interest, from the Old-Age and Survivors Insurance and Disability Insurance Trust Funds was $957 billion in 2016, with $836 billion coming from contributions, $33 billion from taxation of benefits, and $88 billion in interest.

Total expenditures from the funds amounted to $922 billion in 2016. The projected actuarial deficit over a 75-year long range is 2.83% of taxable payroll, an increase of 17 basis points from last year. In 2016, 171 million people had their earnings taxed to pay Social Security. The Social Security program cost $6.2 billion to run in 2016, representing 7 basis points of total expenditures. The interest paid on the funds in 2016 was 3.2%.

The 2017 trustees report may be downloaded from here.

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