Medical

2034 is a pivotal year for Social Security

2034 is a pivotal year for Social Security

If that doesn't sound dire enough, in their annual report, the Social Security trustees said that Medicare's hospital insurance fund will be depleted in 2026, reserves for the fund that pays disability benefits would be emptied in 2032, and all Social Security reserves would be exhausted by 2034.

The report said the total annual cost of Social Security is projected to exceed total annual income in 2018 for the first time since the Reagan era, meaning the program will have to tap into reserves.

After 2034, the trustees say Social Security will be able to pay out about three-quarters of the benefits it owes to recipients.

More than 60 million Americans benefit from both programs, which provide a guaranteed income and healthcare for many retirees and the disabled.

Both the cost-of-living increase and the Medicare outpatient premium are not officially determined until later in the year, and the initial projections can change.




Meanwhile, Medicare's hospital insurance trust fund is expected to run dry in 2026, three years earlier than what the trustees had predicted in last year's report. In reality, it has been running annual deficits since 2010, and the insolvency date has moved up eight years.As the Social Security crisis keeps getting closer, the political parties are moving further away from doing anything about it.What's scary is that Social Security is relatively easy to fix when compared to Medicare, a program where the rising retirement population is interacting with growing healthcare costs.

"The administration's economic agenda - tax cuts, regulatory reform and improved trade agreements - will generate the long-term growth needed to help secure these programs", Treasury Secretary Steven Mnuchin said Tuesday.

Democrats have for months asserted that Republicans would use the deficit - swollen by tax cuts - as "an excuse to cut Social Security and Medicare", in the words of Senator Chuck Schumer of NY, the Democratic leader.

Sixty-two million people, including 45 million retired workers, were receiving OASDI benefits at the end of 2017. Financed with payroll taxes collected from workers and employers, Social Security and Medicare account for about 40 percent of government spending, excluding interest on the federal debt. About 23 percent of older married couples rely on Social Security as their main source of income, according to the program.

In principle, the U.S.is supposed to be paying forward its Social Security and Medicare obligations by building up trust funds to cover future costs. That's the amount the Social Security's trustees said tax income alone could cover.


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