Social Security dips into reserves – “get ready for 2/3 benefits” in a few years

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Social Security trust fund again projected to run dry in 2034

via marketwatch:

Medicare’s finances were downgraded in a new report from the program’s trustees on Tuesday, while the projection for Social Security’s stayed the same as last year.

Medicare’s hospital insurance fund will be depleted in 2026, said the trustees who oversee the benefit program in an annual report. That is three years earlier than projected last year.

This year, like last year, Social Security’s trustees said the program’s two trust funds would be depleted in 2034.

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For the first time since 1982, Social Security had to dip into the trust fund to pay for the program.

It should be stressed that the reports don’t indicate that benefits disappear in those years. After 2034, Social Security’s trustees said tax income would be sufficient to pay about three-quarters of retirees’ benefits.

Congress could at any time choose to pay for the benefits through the general fund.

Medicare beneficiaries also wouldn’t face an immediate cut after the trust fund is depleted in 2026. The trustees said the share of benefits that can be paid from revenues will decline to 78% in 2039. That share rises again to 85% in 2092. The hospital fund is financed mainly through payroll taxes.

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