On Wednesday, April 22, 2020 the Social Security Administration released its annual report regarding the status of Disability Insurance funding and Old-Age Survivors Insurance. Both Trust Funds are projected to be depleted by the year 2035, with a 79% benefits payable.
Last year's estimate for depletion of the Old-Age Survivor's Insurance fund is on par with it being exhausted by the year 2034, with 76% benefits payable. Importantly as well, is the Disability Insurance Trust Fund which has an estimated depletion year of 2065, with 92% of benefits still payable. Last year the Disability Trust Fund had an expected depletion at year 2052. This is good news for Disability benefits.
For perspective in this the combined reserves of Old-Age Survivor's Insurance and Disability Insurance is approximately $2.897 trillion, which was an increase of two and a half billion from last year.
The effects of COVID-19 have not been factored into this equation, though it is foreseeable that with the increase of costs generally, the annual cost of the program will increase over time. Thus, the numbers could change next year after another annual review.
If the math is correct, Congress will by necessity have to meet prior to 2035 to ensure the Trust Fund does not become depleted.
Noteworthy is that at the end of 2019, Social Security paid out $1.048 trillion in benefits to approximately 64 million beneficiaries. You can learn more about long term benefits and the impact by visiting here.
This blog is intended for information purposes only and does not establish legal representation or financial guidance.