Panic as Social Security bosses set date America will run out of cash
The US Social Security and Medicare programs for seniors will both run short of funds to pay full benefits in 2033.
The go-broke dates the two trust funds have moved up due to rising health care costs and new legislation affecting Social Security benefits, according to an annual report released Wednesday.
The yearly assessment found that Medicare's hospital insurance trust fund will be unable to fully cover costs beginning in 2033 — three years earlier than last year's estimate.
Higher-than-forecast hospitalizations of Americans over 65 years old was a key factor.
Social Security's combined trust funds, which support retirement and disability benefits to 70 million Americans, are also expected to be depleted in 2033.
While the year was unchanged from last year's report, it was advanced by three calendar quarters within that year.
The projections reflect higher-than-expected healthcare spending, along with recent legislation that increased Social Security benefits for some workers.
Once the funds are exhausted, beneficiaries would still receive payments, but at reduced levels. Medicare would be able to cover just 89 percent of hospital costs, while Social Security could pay only about 81 percent of promised benefits.
The trustees say the latest findings show the urgency of needed changes to the programs, which have faced dire financial projections for decades.
But making changes to the programs has long been politically unpopular, and lawmakers have repeatedly kicked Social Security and Medicare´s troubling math to the next generation.
President Donald Trump and other Republicans have vowed not to make any cuts to Medicare or Social Security, even as they seek to shrink the federal government´s expenditures.
'The financial status of the trust funds remains a top priority for the administration,' said Social Security Administration commissioner Frank Bisignano in a statement.
The new forecast adds urgency to a long-standing challenge facing Congress, which has repeatedly delayed making reforms due to political sensitivity around the issue.
Lawmakers would need to act — either by raising taxes, reducing benefits, or both —to ensure long-term solvency.
President Donald Trump and many Republican lawmakers have pledged not to cut Medicare or Social Security benefits, but critics say recent legislative changes have worsened the programs' financial outlook.
One provision enacted in January—the Social Security Fairness Act—eliminated two rules that had reduced benefits for certain workers, effectively increasing payments and accelerating the trust fund's projected depletion.
Romina Boccia, director of budget and entitlement policy at the CATO Institute, called the change 'a political giveaway masquerading as reform.'
Instead of tackling Social Security´s structural imbalances, Congress chose to increase benefits for a vocal minority-accelerating trust fund insolvency.'
About 68 million Americans are currently enrolled in Medicare, and more than 70 million receive Social Security benefits.
Both programs are primarily funded through payroll taxes, but costs are projected to outpace revenues due to the country's aging population and rising healthcare expenses.
Experts say failure to act soon could result in sudden benefit cuts and instability for millions of retirees and disabled Americans.
'Congress must act to protect and strengthen the Social Security that Americans have earned and paid into,' said AARP CEO Myechia Minter-Jordan.
Several policy proposals have been floated in recent years, but none have gained significant momentum.
The last major reform to Social Security came in 1983, when the eligibility age for full retirement benefits was raised from 65 to 67.
Without further legislative changes, the federal programs that serve as the backbone of retirement security in the US could face significant challenges within the next decade.
Last year, billionaire CEO Larry Fink said Americans should work beyond the age of 65 to stop the Social Security system collapsing.
Meanwhile, experts recently said Americans are making a big mistake by claiming their Social Security checks early, since delaying their claims could lead to higher payments.
Every year you delay taking a Social Security payment after full retirement age you receive a significant increase in payments up to the age of 70.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Reuters
25 minutes ago
- Reuters
Insurer Aflac discloses cybersecurity incident
June 20 (Reuters) - Insurer Aflac (AFL.N), opens new tab said on Friday it identified suspicious activity on its network in the United States on June 12. The company said it has reached out to third-party cybersecurity experts to investigate the incident and has commenced a review of potentially impacted files. These files contain personal information of its customers, including social security numbers and health-related details, it added. Shares of Aflac fell 1.6% in premarket trading.
Reuters
25 minutes ago
- Reuters
Darden Restaurants lifts sales forecast, beats quarterly estimates on casual dining demand
June 20 (Reuters) - Darden Restaurants (DRI.N), opens new tab forecast annual same-store sales above estimates after strong quarterly results on Friday, banking on demand driven by food delivery and advertising efforts at its casual dining chains such as Olive Garden. Shares of the company rose about 3% in premarket trading after the company also announced a new $1 billion share repurchase program. Casual dining and fast casual restaurant chains, including Olive Garden and Shake Shack (SHAK.N), opens new tab, have benefited from menu innovations and promotions to entice customers, offsetting the impact of consumers turning to home-cooked meals to save money. Meanwhile, fast food chains including burger giant McDonald's (MCD.N), opens new tab, Starbucks (SBUX.O), opens new tab and Domino's Pizza (DPZ.O), opens new tab have been struggling with tepid demand. Darden expects annual same-store sales to grow in the range of 2% to 3.5%, midpoint of which is above analysts' estimates of 2.64%, as per data compiled by LSEG. Initiatives such as home deliveries with the help of Uber Direct and "buy one, take one" offerings at Olive Garden have further helped the restaurant chain operator. Its consolidated same-store sales were up 4.6% in the quarter compared to a year ago, with Olive Garden sales rising 6.9%. The company posted fourth-quarter sales of $3.27 billion, edging past estimates of $3.26 billion. It logged adjusted profit of $2.98 per share for the quarter ended May 25, above estimates of $2.97 per share, owing to moderate price hikes and lower input costs. However, the company forecast annual earnings per share between $10.50 and $10.70, compared with estimates of $10.75 per share.
Geeky Gadgets
27 minutes ago
- Geeky Gadgets
Meet Mo: The AI Assistant Transforming Financial Analysis Forever
What if you could reclaim nearly a third of your workday? For Morningstar's investment analysts, this isn't a hypothetical—it's a reality. With the introduction of Mo, an AI-powered research assistant, Morningstar has transformed how its teams approach the demanding world of financial analysis. Built on the innovative LangGraph intelligence engine, Mo is more than just a tool; it's a fantastic option. By automating repetitive tasks and reducing research time by an impressive 30%, Mo enables analysts to focus on what truly matters: crafting strategies and making informed decisions. In an industry where precision and efficiency are paramount, this shift isn't just helpful—it's innovative. In this overview, Morningstar explain how Mo is reshaping the landscape of investment research. From its ability to process vast datasets with advanced natural language processing to its modular design that ensures adaptability in a rapidly evolving industry, Mo offers a glimpse into the future of financial technology. You'll discover how this AI assistant not only enhances productivity but also minimizes errors and fosters collaboration across teams. As you read on, consider this: how might tools like Mo redefine the boundaries of what's possible in your own field? Morningstar's AI-Powered Assistant How Mo Was Built: A Modular and Scalable Innovation Mo was developed by a dedicated team of engineers to address the challenge of deploying AI across Morningstar's extensive ecosystem, which includes over 60 products and supports a workforce of 12,000 employees. The team adopted a modular architecture, prioritizing scalability and adaptability to ensure seamless integration with evolving AI technologies. This forward-looking approach allows Mo to remain relevant as artificial intelligence continues to advance, making it a sustainable solution for the ever-changing financial industry. The modular design also simplifies updates and maintenance, making sure that Mo can incorporate the latest technological advancements without disrupting existing workflows. This adaptability positions Mo as a long-term asset, capable of evolving alongside the needs of investment professionals and the broader financial sector. What Mo Does: Transforming Research and Analysis Mo's primary function is to process and summarize vast amounts of investment data efficiently. It handles information from over 600,000 investments and hundreds of thousands of research articles, using advanced natural language processing (NLP) and multi-agent workflows to extract insights, refine responses, and ensure accuracy. The results are measurable and impactful: Research time reduced by 20%. by 20%. Writing time cut by 50%. by 50%. Editing errors decreased by 65%. These improvements not only save time but also enhance the quality and reliability of the insights you depend on for critical decision-making. By streamlining the research process, Mo enables you to focus on interpreting data and crafting strategies rather than being bogged down by manual tasks. Morningstar Mo Overview Watch this video on YouTube. Find more information on AI assistants by browsing our extensive range of articles, guides and tutorials. How Mo Enhances Productivity and Decision-Making For investment professionals, Mo delivers precise and actionable insights that are both accurate and verifiable. By automating time-intensive tasks like data summarization, error checking, and information synthesis, it allows you to dedicate more time to strategic analysis and client engagement. This shift in focus can lead to more informed decisions and stronger client relationships. Mo's utility extends beyond analysts. Internal teams such as client success managers, quantitative analysts, and developers have seamlessly integrated Mo into their workflows. By streamlining daily operations, Mo has proven its versatility and value across a wide range of roles within Morningstar. This broad adoption underscores its potential to enhance productivity and collaboration across the organization. Future-Proof Design: Adapting to a Dynamic Industry Mo's modular architecture ensures it remains adaptable to the rapid advancements in AI technology. This design not only supports scalability but also assists the integration of new features and capabilities as they emerge. As the financial industry continues to evolve, Morningstar can seamlessly incorporate innovative technologies into Mo, making sure it remains a valuable tool for investment professionals. The forward-thinking design also reduces the complexity of maintaining and updating the system, allowing Morningstar to focus on innovation rather than troubleshooting. This adaptability ensures that Mo will continue to meet your needs, delivering consistent value in an industry characterized by constant change. Media Credit: LangChain Filed Under: AI, Top News Latest Geeky Gadgets Deals Disclosure: Some of our articles include affiliate links. If you buy something through one of these links, Geeky Gadgets may earn an affiliate commission. Learn about our Disclosure Policy.
