Social Security's spending is expected to grow substantially faster than GDP through the mid-2030s because of aging baby boomers and fewer workers and as a result, the latest report from the trustees of the Social Security trust fund estimate that an across-the-board cut to benefits is looming. Can Social Security survive?
According to the Employee Benefit Research Institute (EBRI) 2018 Retirement Confidence Survey, only 7% of American workers are very confident that Social Security will pay them benefits in retirement that equal the benefits that are being paid to current Social Security recipients.
There's good reason for their pessimism. A pay-as-you-go system, Social Security payments to current recipients has outstripped payroll taxes collected since 2010. Since then, the program's made up the difference by using interest earned on the trust fund that it built up when taxes collected were greater than outlays. However, interest on the trust fund will cease being enough to close the gap beginning in 2018, and as a result, paying future retirees what they're entitled to will require drawing down the $2.9 trillion trust fund until its exhausted.