Latest news with #2033
Daily Mail
11 hours ago
- Business
- Daily Mail
Panic mounts as social security's cash shortfall date revealed
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 (pictured) 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 (pictured), 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 (pictured). 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 (pictured) 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.
Daily Mail
17 hours ago
- Business
- Daily Mail
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.
Yahoo
18 hours ago
- Business
- Yahoo
Social security funds are running out, new data shows
Social security funds are running out, new data shows originally appeared on TheStreet. The Old-Age and Survivors Insurance and Disability Insurance trust funds are projected to deplete their assets by 2033, as stated in the Social Security Board of Trustees' annual 2025 report. At that time, only about 77% of scheduled benefits will be payable. The projected depletion year for the combined Social Security trust funds is 2034, at which time only 81% of the benefits will be payable. Similarly, the Hospital Insurance fund of the Medicare program is projected to be depleted as soon as 2033. This emerging retirement insecurity is prompting many younger Americans, particularly Millennials and Gen Z, to explore alternatives beyond conventional savings, as per reports dated April 2025. The survey also found that 20% of respondents from Gen Z and Generation Alpha would accept their pension in whole or in part in cryptocurrency, with 78% of respondents trusting alternative retirement savings options more. Furthermore, 60% of Gen Z and millennials plan to increase their crypto holdings, and two-thirds aim to expand their investments; over half of them already allocate retirement assets to cryptocurrencies. With 62% of respondents intending to engage in Fidelity's crypto-oriented IRA, the future holds a closer integration of cryptocurrency in retirement strategies. With 21% of Americans already dedicating more savings to crypto than to conventional stocks, almost half of Americans allocate a sizable amount—10% to 20%—of their retirement money to cryptocurrencies. However, enthusiasm for cryptocurrency hasn't been matched by mainstream financial professionals and regulators, including the U.S. Department of Labor, which has warned against using cryptocurrency for retirement accounts, citing concerns about volatility, fraud, and valuation issues, according to Investopedia. Retirement advisor Ric Edelman recently advised holding crypto of about 10% to 40% as a small part of a retirement portfolio. Social security funds are running out, new data shows first appeared on TheStreet on Jun 18, 2025 This story was originally reported by TheStreet on Jun 18, 2025, where it first appeared. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
New York Times
a day ago
- Business
- New York Times
Trump Administration Live Updates: ICE Limits Congressional Visits as Democrats Pressure Agency
Social Security benefits could be reduced by about 23 percent in less than a decade if Congress does not shore up the program, its trustees said on Wednesday. The Social Security program faces a longstanding financing shortfall that, if left unaddressed, would slash millions of retirees' crucial monthly benefit payments in just eight years. The deteriorating financial outlook for the retirement program, which supports roughly 61 million Americans, was released in its annual trustees report on Wednesday. It is now expected to run out of money nine months earlier than previously projected, which means benefits could be reduced by 23 percent if Congress does not act to bolster the program. That puts the Social Security Old-Age and Survivors Insurance Trust Fund, which pays retiree and survivor benefits, on schedule to be depleted in 2033, or when today's 59-year-olds turn 67. At that time, the program will have enough revenue coming in to pay only 77 percent of total scheduled benefits. The most recent setback was driven largely by a policy change, known as the Social Security Fairness Act, which took effect in January and increased benefits for about 2.8 million government and public sector workers. But there were other factors: Government actuaries now assume that the birthrate will remain lower for longer, while projecting that workers' compensation would weaken over time as they capture a lower share of the nation's economic output. A separate trust fund, which finances Social Security disability benefits for an additional 8.2 million people, is on more stable ground. It will be able to pay all of its bills through 2099, the report said. The trustees also reported a slightly weaker financial outlook for the trust fund that finances hospital care for Medicare beneficiaries. They expect that that trust fund will be unable to pay all its bills in 2033, three years sooner than it had estimated last year. That change was driven mostly by increased spending on hospital care in 2024, a shift the trustees believe will continue into the next few years. In their report, the trustees urged lawmakers to address the shortfalls in a timely way so that any changes could be phased in gradually, giving workers and beneficiaries time to adjust. 'Implementing changes sooner rather than later would allow more generations to share in the needed revenue increases or reductions in scheduled benefits,' the trustees said in the report. Some policy experts say it's hard to fully project Social Security's outlook because the latest report doesn't reflect many of President Trump's policies, including his tariff and mass deportation plans, which are expected to worsen the program's deficits. Image Kathleen Romig of the Center on Budget and Policy Priorities said the new report on Social Security relied on assumptions from December. 'The world has changed dramatically since then,' she said. Credit... Jacquelyn Martin/Associated Press 'The most important story is not in the report,' said Kathleen Romig, director of Social Security and disability policy at the Center on Budget and Policy Priorities, who noted that the report's economic assumptions were locked in at the end of last year. 'The world has changed dramatically since then.' If the administration's tariffs cause the economy to contract and lead to job losses, that would dampen trust fund revenues because fewer payroll taxes would be flowing to the fund. If tariffs caused price increases, that could lead to a higher cost of living adjustment for Social Security recipients and therefore a bump in benefits. Immigrants, both lawful and otherwise, are generally a net positive to the trust fund. One analysis, from October, projected that Mr. Trump's proposals would accelerate the trust fund's insolvency by three years. Social Security and Medicare have long faced a financing shortfall, partly because of demographic changes. Dwindling birthrates mean fewer workers are paying taxes into the programs, all while thousands of baby boomers are retiring daily and collecting their benefits for longer periods. In addition, a larger share of the country's wage base is not subject to payroll taxes, Social Security's lifeblood, compared with years past. The taxes are applied only up to $176,100 in income, and rising income inequality means a greater share of Americans' earnings exceeds that cap and is not taxed. Mr. Trump has vowed to protect Social Security benefits, but he hasn't introduced any proposals to shore up its financing. He empowered Elon Musk's Department of Government Efficiency, known as DOGE, to embed at the agency, where it enacted aggressive federal job cuts and policy changes at a time when beneficiary claims were at a record high and staffing was already thin. The changes threw the agency into chaos, left retirees nervous and confused, and overshadowed its true challenges. Mr. Musk, who recently left Washington amid a blowup with Mr. Trump, had cast his efforts to root out waste and fraud as a way to preserve Social Security. 'As a result of the work of DOGE, legitimate recipients of Social Security will receive more money,' he said on Fox News in March. But those kinds of efforts would have a minimal effect on a program that is already efficiently run, policy experts said, with overhead costs of half a percent of its total spending, and an improper-payment rate of 0.3 percent. 'To even suggest that it is possible to solve the fiscal challenges faced by Social Security focusing only on fraud, waste and abuse is misleading at best and dishonest at worst,' said Jason Fichtner, who held several senior positions at the Social Security Administration after being appointed by former President George W. Bush. To put the magnitude of the financing shortfall in perspective, the trustees noted that revenue would need to rise by an amount that would raise the payroll tax by 3.65 percentage points. That would keep the combined retirement and disability trust funds solvent for the next 75 years, and bring the total tax to 16.05 percent. In many cases, workers split the payroll tax burden with their employers; each currently pays 6.2 percent on earnings up to $176,100, for a total of 12.4 percent. By law, Social Security (unlike parts of Medicare) cannot use money from the federal budget's general revenues to pay benefits. Reducing all beneficiaries' payments by 22.4 percent would also close the financing gap, but proposals to shore up Social Security often combine different approaches to varying degrees. 'There are many variations on these options, including those that vary the timing, magnitude, and other specifics of the changes under consideration,' the trustees said in the report. Republican-led proposals have historically suggested cutting benefits by raising the retirement age, among other changes. Democrat-led proposals typically support raising taxes. Government actuaries have estimated that fixing Medicare's trust fund over the long term would also require significant changes. To make sure Medicare had enough money to pay all its bills over the long term, Medicare would need to either reduce its overall spending on hospital care by 9 percent or lawmakers would have to raise the payroll tax that funds it to 3.32 percent from 2.9 percent, according to the report. Neither option is under discussion by Congress, and Mr. Trump has vowed not to touch the program. A major bill working its way through Congress would cut Medicaid and other social safety net programs, but make almost no adjustments to Medicare. Unlike Social Security, not all of Medicare's bills are financed through a dedicated trust fund. Payments for the parts of Medicare that cover doctors visits and prescription drugs are funded through the government's general fund and with premiums paid by beneficiaries. But the trustees did note that those costs are also expected to rise substantially, putting pressure on the federal budget. Many baby boomers will reach old age over the next decade, meaning they are likely to need more medical care. Myechia Minter-Jordan, the chief executive of AARP, called on Congress to stabilize the social insurance programs, given their widespread support. She added: 'Older Americans nationwide consistently say that the future of Social Security and Medicare are the issues they care about most, and they stand ready to hold politicians across party lines accountable to strengthen these programs for the long term.' Nicholas Nehamas contributed reporting.
New York Times
2 days ago
- Business
- New York Times
Social Security's Finances Erode Further and Could Spell Benefit Cuts
The Social Security program faces a financing shortfall that, if left unaddressed, would slash millions of retirees' crucial monthly benefit payments in just eight years. The deteriorating financial outlook for the retirement program, which supports roughly 61 million Americans, was released in its annual trustees report on Wednesday. It is now expected to run out of money nine months earlier than previously projected, which means benefits could be reduced by 23 percent if Congress does not act to bolster the program. That puts the Social Security Old-Age and Survivors Insurance Trust Fund, which pays retiree and survivor benefits, on schedule to be depleted in 2033, or when today's 59-year-olds turn 67. At that time, the program will have enough revenue coming in to pay only 77 percent of total scheduled benefits. The most recent setback was driven largely by a policy change, known as the Social Security Fairness Act, which took effect in January and increased benefits for about 2.8 million government and public sector workers. But there were other factors: Government actuaries now assume that the birthrate will remain lower for longer, while projecting that workers' compensation would weaken over time as they capture a lower share of the nation's economic output. A separate trust fund, which finances Social Security disability benefits for an additional 8.2 million people, is on more stable ground. It will be able to pay all of its bills through 2099, the report said. The trustees also reported a slightly weaker financial outlook for the trust fund that finances hospital care for Medicare beneficiaries. They expect that that trust fund will be unable to pay all its bills in 2033, three years sooner than it had estimated last year. That change was driven mostly by increased spending on hospital care in 2024, a shift the trustees believe will continue into the next few years. Want all of The Times? Subscribe.
