How Social Security's Declining Trust Fund Affects Your Retirement Plans

  • Forbes | by: Bob Carlson |
  • 05/18/2019 12:00 AM
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The latest annual report from the Trustees of Medicare and Social Security sparked a lot of discussion, but many of the conclusions people made are wrong.

Every year the trustees of Social Security issue a report to Congress and the public on the financial status of the program and its trust funds. You can find the 2019 report here.

The important trust fund for most of us is the Old-Age and Survivors Insurance trust fund (OASDI). This is the one that covers retirement and survivor’s benefits. There’s another trust fund for disability income.

Every year the key headline for the media is the latest estimate of the year the OASDI is projected to drain its reserves, which usually is referred to as Social Security “running out of money” or “going broke.” This year’s estimate for the life of OASDI’s reserves is the same as it was last year. The OASDI trust fund is estimated to be depleted in 2034. That’s only 15 years away.

The annual cost of the program is expected to exceed all its income in 2020 for the first time since 1982. The cost is expected to exceed income every year for the next 75 years. (Each year the projections are made only for the next 75 years.) The cost of the program has exceeded its non-interest income since 2010.
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