By: Elliot Schreur and Benjamin W. Veghte
Published: June, 2018
The 2018 Report of the Social Security Trustees projects that revenues will be sufficient to pay all scheduled benefits until 2034 and roughly three quarters of scheduled benefits thereafter. In 2017, Social Security income from payroll contributions, tax revenues, and interest on reserves exceeded outgo by $44 billion. Reserves, now at $2.9 trillion, are projected to begin to be drawn down in 2018 in order to pay full scheduled benefits. The Disability Insurance (DI) Trust Fund is projected to cover scheduled benefits until 2032, and the Old-Age and Survivors Insurance (OASI) Trust Fund until 2034. On a combined OASDI basis, Social Security is fully funded until 2034, but faces a projected shortfall thereafter. After the projected depletion of the combined OASDI trust funds, Social Security contributions and tax revenues would continue to be received and would cover about 79 percent of scheduled benefits (and administrative costs, which are less than 1 percent of outgo). The long-range actuarial shortfall over 75 years is projected to be 2.84 percent of taxable payroll – that is, 2.84 percent of all earnings that are subject to Social Security contributions. This projected long-term revenue shortfall is substantially unchanged from the 2.83 percent of taxable payroll reported in the 2017 Trustees Report. Timely revenue increases and/or benefit reductions could bring the program into long-term balance, preventing the projected shortfall.