Social Security Faces a Future of Insolvency Without Congressional Action

It is more important than ever to take advantage of your Social Security benefits or consider applying for them if you have not already. Currently, the system is facing more long-term solvency challenges than ever before. This means that benefits reserves are expected to be fully depleted within the next decade, possibly leading to reduced benefits moving forward unless Congress adjusts the law. Here are all the details you need to know to protect your finances and secure your financial future.

What Is Happening to Social Security Benefits?

Each year, the Social Security Board of Trustees releases its annual report detailing the financial status of the Social Security Trust Funds, which are responsible for paying benefits to all individuals who are registered for them. Independently, the OASI Trust Fund is running out of funds rapidly, with a projected depletion date of 2033. Meanwhile, the DI Trust Fund is expected to last past its 75-year projected period. Combined, the Old-Age and Survivors Insurance and Disability Insurance (OASI and DI) reserves are estimated to have enough revenue to fully pay out all beneficiaries up until 2034.

If no changes are made to increase these funds, the Social Security Administration will be forced to pay out benefits at a reduced rate, meaning the average beneficiary could receive delayed monthly payments, if not miss them altogether. Current estimates indicate that 77% of scheduled benefits from the OASI Fund would still be available, while closer to 81% of benefits would be available from the combined trust fund.

Why Is This Happening?

There are a few reasons why this has occurred:

• Smaller Working Pool: Over time, the ratio of workers paying into Social Security taxes has shrunk when compared with those who receive benefits (i.e. the Baby Boom generation). Fewer younger workers and a larger unemployed elderly population means there is not enough being paid into the system to account for everyone who needs it.
• Older Population: As the older generations continue to grow older, this larger segment of the population is placing a strain on the “pay-as-you-go” system structure.
• Failure to Act: While proposals have been made over the years, Congress as a whole has failed to take action to reform the system they know is struggling. There are solutions available, such as raising the cap on Social Security taxes, so wealthier people are paying more into the system, but it has not reached a Congressional majority.

What Social Security Insolvency Means For You and How Congressional Action Can Help

Continued failure to address depleting Social Security benefits means elderly and disabled Americans who should reasonably receive benefits could see their benefits be reduced by up to 19% starting around 2034. Analysts have recommended that Social Security be completely redone to ensure a more stable financial future for the nation and its aging population.

If you are concerned with the future of Social Security benefits, you can start contacting your elected officials to voice your concerns. Similarly, if you are considering applying for Social Security Disability, you should seriously consider applying now. Filing sooner rather than later can maximize the amount of back pay you can secure before new changes take effect.

For assistance with applying for Social Security benefits, contact the experienced team at Jan Dils, Attorneys at Law today. Let us ease your mind by securing the benefits you worked for so you can spend more time enjoying them.