The Social Security Board of Trustees released their latest report today on the solvency of the so-called "Trust Fund." Quick summary of key highlights:
- The Disability program is now projected to be depleted in 2023, with 89% of benefits still payable at that time if no further program changes are made between now and then.
- The Retirement program alone is projected to last until 2035 (2034 under combined Trust Fund reserves, with 79% of benefits still payable at that time if no changes are made).
- Combined Trust Fund reserves will continue to grow through 2019. In 2020, program costs are projected to be more than income.
- The reserves earned interest at an effective annual rate of 3.4% in 2015. (McClanahan comment: with interest rates nailed to the floor for so long now--and likely to continue--will Fund returns in the coming years be lower and depletion be faster than projected?)
- Social Security paid benefits of $886 billion during 2015 to about 60 million beneficiaries.
- 2015 costs to administer the program were only 0.7% of expenditures.
I've blogged before that Social Security is very fixable. It's a political problem more than a financial problem. I could fix it in 30 minutes but, alas, nobody has appointed me benevolent dictator to do so.
So how about trying your hand at Social Security reform? The American Academy of Actuaries has created a cool online tool called "Play the Social Security Game." The game is a brief series of questions where you choose different benefit adjustments or revenue increases to secure the system's future solvency. On the right side is a thermometer graph that quantifies how much of the problem your solutions have fixed. And you can go back and change your answers to see the impact of different choices. Give it a go...it's fun and informative.
[Edited June 26, 2016 to clarify how long Retirement funds are projected to last vs. combined Trust Funds.]