Social Security will dry up in 2033, 3 years sooner than last projection
Social Security is rushing faster toward insolvency, driven by retiring baby boomers, a weak economy and politicians' reluctance to fix the huge retirement and disability program.
The trust funds that support Social Security will run dry in 2033 — three years earlier than previously projected — the government said Monday.
There was no change in the year that Medicare's hospital insurance fund is projected to run out of money. It's still 2024. The program's trustees, however, said the pace of Medicare spending continues to accelerate. Congress enacted a 2-percent cut for Medicare last year, and that is the main reason the trust fund exhaustion date did not advance.
The trustees who oversee both programs say high energy prices are suppressing workers' wages, a trend they see continuing. They also expect people to work fewer hours than previously projected, even after the economy recovers. Both trends would lead to lower payroll tax receipts, which support both programs.
Unless Congress acts, payments to millions of Americans could be cut.
If the Social Security and Medicare funds ever become exhausted, the nation's two biggest benefit programs would collect only enough money in payroll taxes to pay partial benefits. Social Security could cover about 75 percent of benefits, the trustees said in their annual report. Medicare's giant hospital fund could pay 87 percent of costs.