Social Security to Run Out in 2035

Social Security.  Disability.  Medicare.

If you're retired, there's a great chance that you know these terms all too well.  And if you're not yet retired, you probably know someone who uses one of the programs, if not all three.  And, whether you realize it or not, each of these programs are in danger of running out of the funds they rely on.  Here are some facts that you may not be aware of.

Fact #1:  Millions of Americans utilize these very important programs.

The number of people in the United States who use these programs, whether retired or not, is a bit staggering.  For example, around 44 million receive Social Security checks each month.  For disability, the number is approximately one-fourth of that.  Medicare is now over 40 million, as well.  Obviously, many Americans and their families rely on these programs. So unless Congress intercedes and fixes the problems with each one, a huge number of Americans could be negatively affected.

Fact #2:  The funds for all these programs are at risk.

At some point, each of these programs will face the same dilemma: the trust fund from which the funds are distributed will be depleted to a point where full benefits simply won't be available.  The first to go would be disability, which is in danger of collapse as of 2016.  Medicare would be next, with an estimated date of depletion in 2024.  Just over a decade later, in 2035, is when the Social Security program would be threatened.  These dates aren't necessarily set in stone, but extending them means that changes would need to be made.

Fact #3:  Merging Social Security and disability could provide more time, overall.

As it currently stands, the government has more than a decade to find a solution for Medicare and more than two decades for Social Security.  A number of lawmakers believe that this is plenty of time to figure it out.  Unfortunately, disability is a more pressing matter.  If the 2016 date holds true, that means we have only four years to make changes to the current program.  One temporary fix would be to merge the trust fund utilized by Social Security with the one for disability, and then disperse payments for each from this single fund.  By going so, the depletion date of both would change to 2033.  This is only two years sooner for Social Security and would provide disability with an additional 17 years of funds.  Most lawmakers believe that this would give more than ample time to make some decisions regarding each program.

Fact #4:  The programs are getting worse over time.

This seems to be especially true with Social Security and disability.  Last year, there was a 3.6% adjustment made to cover cost-of-living increases, which was higher than expected.  This year, there will likely be another 1.8% increase.  These increases, while understandable, are pushing the cost of the program upwards.

A higher enrollment rate is an issue, as well.  For example, Social Security saw a jump during the recession as some elderly workers were forced into an early retirement and had no choice but to apply for benefits sooner than expected.  And disability has seen a 64% enrollment increase since 2000.  To put this in real numbers, disability took in only $106 billion last year while paying out $132 billion in benefits.  With only $154 billion remaining in the trust fund, it's clear to see why it only has four years left before benefits begin to decrease.

Source: http://firstsecurityfinancialshow.com/blog/bid/167297/Social-Security-to-Run-Out-in-2035

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