Page 10 - Network Magazine Summer 2019
P. 10

                    What the future holds for Social Security and should you expect to receive benefits when you retire?
JOSEPH A. MASTRIANI, CPA/PFS, CFP SHAREHOLDER, BUCKNO LISICKY & COMPANY
Most Americans will eventually receive Social Security benefits. Each year, the Trustees of the Social Security Trust Fund release a lengthy report to Congress that as- sesses the health of this important program. The newest report, released back in April of this year, discusses the current financial condition and ongoing financial chal- lenges that the program faces.
HIGHLIGHTS OF SOCIAL SECURITY TRUSTEES REPORT
Social Security's total cost is projected to exceed its total income (including interest) in 2020 and remain higher for the next 75 years. The U.S. Treasury will need to withdraw from trust fund reserves to help pay benefits. The Trust- ees project that the Old-Age and Survivors Insurance/ Disability Insurance trust fund reserves or (OASDI) will be depleted in 2035, one year later than projected in last year's report, unless Congress acts.
Once the trust fund reserves are depleted, payroll tax revenue alone should still be sufficient to pay about 80% of scheduled benefits for 2035, with the percentage fall- ing gradually to 75% by 2093.
The OASI Trust Fund, when considered separately, is pro- jected to be depleted in 2034. Payroll tax revenue alone would then be sufficient to pay 77% of scheduled benefits. These figures are unchanged from last year's report.
The DI Trust Fund is expected to be depleted in 2052, 20
years later than projected in last year's report. The sig- nificant depletion date change reflects the fact that both benefit applications and the total number of disabled workers currently receiving benefits have been declin- ing over the past few years. Once the DI Trust Fund is depleted, payroll tax revenue alone would be sufficient to pay 91% of scheduled benefits.
WHY IS SOCIAL SECURITY FACING FINANCIAL CHALLENGES?
Social Security is funded primarily through the collection of payroll taxes. Because of demographic and economic factors, including higher retirement rates and lower birth rates, there will be fewer workers per beneficiary over the long term, worsening the strain on the trust funds.
WHAT IS BEING DONE TO ADDRESS THESE CHALLENGES?
Currently, not much, but the reports urge Congress to address the financial challenges facing these programs soon, so that solutions will be less drastic and may be implemented gradually, lessening the impact on the pub-
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