2024 Social Security Trustees Report

The Trustees of the Social Security and Medicare Trust Funds project the Social Security Trust Fund will run out of money in 2033. After the Social Security (OASI) Trust Fund runs out, the trustees project Social Security will be able to payout 79% of promised benefits.

When is Social Security projected to run out of money?

The combined trust funds are projected to run out in 2035, however, by law, the two trust funds cannot be combined.

Despite most news outlets reporting 2035 as the year that “Social Security runs out of money,” there would need to be an act of Congress to combine the two trust funds so that the retirement part of Social Security could be funded by the disability parts.

There are 2 parts to Social Security:

• Old Age & Survivors Insurance (OASI), which is what you commonly think of as retirement Social Security
• Disability Insurance (DI)

Both parts have their own separate trust fund. Retirement Social Security (OASI) is projected to use up its Trust Fund by 2033.

Social Security Disability (DI) Trust Fund is not projected to run out, at all, over the 75 years of the report.

When will Medicare run out of money?

Good news for Medicare! The Hospital Insurance (HI) Trust Fund (for Medicare part A) will be able to pay 100 percent of total scheduled benefits until 2036, 5 years later than reported last year.

Supplementary Medical Insurance (SMI) is projected, by the trustees, to always have enough money since the revenue comes partly from Part B insurance premiums, and mostly from general US government taxes.

Why did the combined Social Security Trust Fund improve?

There were three main changes in their assumptions this year:

1. Higher Labor Productivity: more people are expected to work, at higher wages, in the future
2. Lower Disability Claims: less people are expected to become disabled
3. Lower Fertility: less people are expected to be born, which lowers the future number of workers (this is a negative for Social Security over the next 75 years)

What will change when Social Security runs out of money?

After 2033, Social Security is projected to only have 79% of the revenue needed to fund the promised benefits.

After 2036, Medicare part A (Hospital Insurance) is projected to only have 89% of the revenue needed to fund the promised benefits.

How can we fix Social Security?

There are only two ways to fix Social Security – raise taxes or cut benefits. Most likely there would be a combination of both.

The Trustees have projected, that if Congress made changes to Social Security right away then the 3 options are either:

• Raise payroll taxes by 3.33%, from 12.40% to 15.73%,
• Cut all benefits by 20.8%, or
• Cut all benefits, for people not yet on Social Security, by 24.8%
• or, some combination of the 3.

What’s in the 2024 Social Security and Medicare Trustees Report?

Here’s my live take from when the Trustees report was released on May 6, 2024:

To see how the 2024 report changed from 2023 check out my report on the 2023 Social Security Trust Fund report.

Resources:

2024 Social Security Trustees Report
Social Security and Medicare Boards of Trustees Annual Report Summary
Video: When is the best time to file for Social Security?

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