Social security may run out of cash by 2034, trustee reports say

Reports from social security and Medicare trustees have moved the date of depletion of social security reserves one year higher.

Washington — The government’s two largest benefits programs, social security and Medicare, are putting more and more pressure on the finances of the two programs due to the retirement and catastrophic outbreaks of millions of baby boomers. We are under intense financial pressure.

A report from program trustees released on Tuesday predicts that the date of depletion of social security reserves will be one year ahead of schedule, and that social security will not be able to pay the full amount from 2034 instead of 2035. increase.

Medicare is still expected to run out of its reserves in 2026, the same date as last year’s estimate.

“The finances of both programs are heavily impacted by the 2020 pandemic and recession,” the Board of Trustees said.

The report states that employment, earnings, interest rates and economic growth plummeted in the second quarter of 2020 after the pandemic struck the United States.

“Given an unprecedented level of uncertainty,” the report states that there was no consensus on how the long-term effects of a pandemic would affect the two benefit programs.

When the Social Security Trust Fund is exhausted, the government will be able to pay 78% of the planned benefits, the report said.

Reducing benefits of that magnitude causes political turmoil, so Congress will recover lost benefits by raising the payroll tax paid by current workers or by increasing government borrowing to make up for the shortfall. You may find a way.

The government’s economic experts, who prepared the social security report, said the recent rise in inflation meant that the 2022 living cost adjustment would approach 6%, a significant jump from the 1.3% COLA awarded this year. I did.

Medicare’s “Part B” premium for outpatients is projected to rise $ 10 a month to $ 158.50 in 2022, under intermediate assumptions in the report.

A new report, months delayed, represents the government’s efforts to assess the impact of last year’s pandemic and recession on the financial position of two major profit programs.

The US economy lost a staggering 22.4 million jobs in March and April 2020 as a pandemic caused companies to close or shorten their business hours and the economy fell into recession.

However, employment recovered as the recession turned out to be temporary and economic growth resumed. Employers have regained 16.7 million jobs since April 2020, but the increase has reduced the workforce to less than 5.7 million before the pandemic.

Social security may run out of cash by 2034, trustee reports say

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