The Social Security Board of Trustees on Thursday released its annual report on the long-term financial status of the Soecial Security Trust Funds. The combined asset reserves of the Old-Age and Survivors Insurance and Disability Insurance (OASDI) Trust Funds are projected to become depleted in 2034, the same as projected last year.
However, the Disability (DI) trust fund outlook, which has improved by five years due to a temporary increase of its share of the payroll tax, is now projected to become depleted in 2028 compared with last year's estimate of 2023.
In the 2017 Annual Report to Congress, the Trustees announced that the asset reserves of the combined OASDI Trust Funds increased by $35 billion in 2016 to a total of $2.85 trillion. The combined trust fund reserves are still growing and will continue to do so through 2021. Beginning in 2022, the total annual cost of the program is projected to exceed income.
If Congress does not act before then, the combined trust fund reserves are projected to become depleted in 2034. At that time, there will be sufficient income coming in to pay just 77% of scheduled benefits.
"It is time for the public to engage in the important national conversation about how to keep Social Security strong," said Nancy A. Berryhill, acting commissioner of Social Security. "People understand the value of their earned Social Security benefits and the importance of keeping the program secure for the future."
In 2016, about 61 million people received Social Security benefits — including retirement, survivor and disability benefits — totaling about $911 billion. During the same year, an estimated 171 million people paid payroll taxes on their earnings.
The cost-of-living adjustment for 2018 benefits, which will be announced in October, is expected to exceed 2%, making it the largest COLA since 2011 when benefits increased by 3.6%. With an average retirement benefit of $1,360 per month in 2017, a 2% COLA would boost benefits by about $27 per month and would increase the maximum retirement benefit of $2,687 for someone claiming benefits at full retirement age in 2017 by about $54 per month.
However, anticipated premium increases in Part B Medicare, which covers doctors' visits and outpatient services, could easily consume much of the Social Security COLA for many retirees next year.