BLOG: SUMMARY OF THE 2019 SOCIAL SECURITY TRUSTEE REPORT: WE’RE ALL IN THIS TOGETHER
Every April, the Social Security Trustees release their annual report. Aside from some positives seen in the disability programs, the gravity of the situation is immediate, enormous and inescapable.
The Old Age and Survivors Insurance (retirement)Trust will have $ 00.00 reserves in 2034. The Social Security Disability Insurance (SSDI) Trust is projected to pay claims through 2052. This means that the combined funds will run dry in 16 years (2035). And with the average life expectancy of the newer healthier retirees to be at least 85, everyone seeing this must understand, WE ARE ALL IN THIS TOGETHER!
If you’re 51 years old and plan for retirement at the age of 65, the fund that should be paying benefits will be insolvent. It also means that if you or your parents are just beginning to receive old age social security retirement, benefits will be depleted by the time they reach 78. At that point all retirees would see their cash benefits slashed 20% across the board. This reduction in benefits would increase to 25% over time. Assuming an average life expectancy and income, a present day 40-year-old is likely to be shorted $ 114,000.00 of total benefits over what is currently scheduled for him. Someone born this year is likely to be shorted $ 253,000.00 of total benefits than what is currently slated for their retirement beginning in 2084.
On a cash flow basis, SSA is projected to operate under a $ 81,000,000,000.00 deficit for 2019 alone. The program will run a $ 1.8 trillion deficit over the next 10 years. Reduced to present value, Social Security’s 75-year actuarial balance is $ 14.8 trillion.
In 2000 the program’s costs represented 10.4% of all payroll.
In 2019 costs represent 13.9% of all payroll.
In 2030 costs will be 15.8% of all payroll.
In 2093 costs will be 17.5% of all payroll.
Revenue is projected to only rise from the current 12.9% to 13.4% by 2093.
The trustees celebrated one improvement over last year’s report; this year’s projected 75-year deficit is the equivalent of 2.78% of all payroll as opposed to last year’s 2.84%. The fix is due to improvements in the disability program’s ‘finances’.
TRUSTEES’ VERSION: With a larger share of workers with disabilities remaining in the workforce, SSDI’s projected costs have fallen by 5 percent (8 percent since 2016). As a result, the Trustees now believe SSDI will be solvent until 2052 – a two-decade improvement relative to last year’s projections and an almost three-decade improvement relative to 2016’s projections.
MIKE’S VERSION: The SSA is denying disability claims like it’s going out of style. It’s a lot easier to tell someone that they are not disabled and can get a job carrying a sign outdoors during the polar vortex than it is to tell people that they’re not 65 years old and retirement ready.
The trustees have suggested several ways the country can come together and replenish the fund:
1. INCREASE PAYROLL TAXES BY 22%;
2. DECREASE ALL SOCIAL SECURITY BENEFITS CURRENTLY BEING PAID BY 17%.
3. DECREASE ALL THE NEW CLAIMS BEING MADE BY 20%.
Waiting till 2035 to make the changes will increase the adjustments to taxes by over 33% and place 84,000,000 future retirees and 190,000,000 workers at risk.
WHATEVER COMBINATIONS OF THOUGHT AND ACTION COME TOGETHER TO ALIEVIATE THIS PERIL, WE ARE ALL PART OF, CONTRIBUTE TO AND BENEFIT FROM THE GREATEST GOOD DONE. THIS TEST OF ABUNDANCE DID NOT COME ABOUT BECAUSE WE WERE A SELFISH OR RECKLESS NATION.