Social Security funds are expected to be depleted by 2034, a year earlier than projected, and the future of the program remains “uncertain,” the federal government said in a report.
The projection was bumped up from 2035 as a result of the coronavirus pandemic, which presented a strain on the program, according to the grim report published by the Social Security Administration (SSA) on Tuesday. The program had more than 65 million beneficiaries who receive monthly Social Security payments by the end of 2020, the agency said.
“The Trustees’ projections in this year’s report include the best estimates of the effects of the COVID-19 pandemic on the Social Security program,” SSA Acting Commissioner Kilolo Kijakazi said in a statement. “The pandemic and its economic impact have had an effect on Social Security’s Trust Funds, and the future course of the pandemic is still uncertain.”
In 2020, the SSA paid more than $1.1 trillion to beneficiaries of the Old-Age and Survivors Insurance (OASI) and Disability Insurance (DI) programs. OASI provides monthly benefits to retired workers and relatives of deceased insured workers while the DI program awards benefits to disabled workers.
The combined asset reserves of the OASI and DI programs will be depleted by 2034, the agency said. The OASI was implemented by the Social Security Act Amendments of 1939 and the DI was introduced in 1956.
The government also altered its projection for the OASI Trust Fund, which it said would be depleted by 2033, according to the report. The SSA previously projected the trust fund would run dry in 2034.
The DI Trust Fund depletion date was changed to 2057, eight years earlier than projected in previous reports.
“OASDI cost has been increasing much more rapidly than non-interest income since 2008 and is projected to continue to do so through about 2040,” the report said. “In this period, the retirement of the baby-boom generation is increasing the number of beneficiaries much faster than the increase in the number of covered workers, as subsequent lower-birth-rate generations replace the baby-boom generation at working ages.”
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