On March 31, 2023, the Social Security Board of Trustees released its annual report on the financial status of the Social Security Trust Funds. The combined asset reserves of the Old-Age and Survivors Insurance (OASI) trust funds are now projected to be depleted in 2033 – just 10 years from now. This is one year sooner than previously projected.
In the report, the Trustees announced that the total annual cost of the program is projected to exceed its total annual income this year (2023), and remain in a deficit going forward. In fact, Social Security’s cost has exceeded its total income since 2021. This is due largely to a decline in the birth rate after the baby boom period, resulting in a decreasing number of workers paying into the system, while at the same time, there is an increasing number of retiring beneficiaries collecting.
If Congress does not act by 2033, there would only be enough income coming into the Social Security program to pay for 80-percent of the scheduled benefits. This means that for individuals in their mid-late 50’s, you will only receive 80-percent of your Social Security benefits when you retire. All others receiving Social Security retirement will also see their benefits drop 20% at that time.
Social Security plays a critical role in the lives of 67 million beneficiaries and 180 million workers and their families. For the majority of retirees, Social Security accounts for more than half of their income during retirement. A reduction in those benefits would likely have a staggering effect on our senior population.
Congress has not passed any major Social Security legislation since the early 1980’s. Despite the fact that the Social Security program enjoys broad support across the political spectrum, Congress has failed to pass legislation and the political will to do so appears in short supply.
If you have concerns about your retirement planning, please contact Beaupre Law today to schedule a conversation.