The trust funds the Social Security Administration relies on to pay benefits are now projected to run out in 2035, one year later than previously projected, according to the annual trustees’ report released Monday.
On the projected depletion date, 83% of benefits will be payable if Congress does not act sooner to prevent that shortfall.
The Social Security trustees credited the slightly improved outlook to more people contributing to the program amid a strong economy, low unemployment and higher job and wage growth. Last year, the trustees projected the program’s funds would last through 2034, when 80% of benefits would be payable.
Social Security’s new 2035 depletion date applies to its combined trust funds.
The trust funds help pay for benefits when more money is needed beyond what is coming in through payroll taxes. Currently, 6.2% of workers’ pay is taxed for Social Security, while an additional 1.45% is taxed for Medicare. The total 7.65% is typically matched by employers. High earners may have an additional 0.9% withheld for Medicare.
While the combined depletion date for Social Security’s trust funds is typically used to gauge the program’s solvency, the funds cannot actually be combined based on current law.
Social Security’s two trust funds have distinct projected depletion dates.
The fund used to pay retired workers, their spouses and children, and survivors — formally known as the Old-Age and Survivors Insurance Trust Fund — is projected to last until 2033, which is unchanged from last year. At that time, 79% of those scheduled benefits may be payable.
The fund used to pay disability benefits — known as the Disability Insurance Trust Fund — will be able to pay full benefits until at least 2098, the last year of the projection period.