Will benefits from Social Security be drastically reduced when the system starts running out of money in 2016 as predicted?

No, but benefits will be reduced, according to Social Security officials who have told Congress the system’s financial status is unchanged from 2012.

That means 77 percent of benefits will still be payable in 2033 when Old-Age and Survivors Insurance and Disability Insurance (OASDI) Trust Funds are expected to be depleted. Eighty percent of disability benefits will still be available in 2016 when the Disability Insurance Trust Fund is forecast to be depleted.

Cost of Program Will Exceed Income by 2020

The projected depletions point the importance of Congress finding solutions to protect the system and the contributions millions of Americans have been making to it throughout their working years, note Ormond Beach Social Security attorneys at Johnson & Gilbert, who have been helping Florida clients with Social Security claims for more than 15 years.

In its 2013 annual report to Congress Social Security trustees noted:

  • The cost of the program will exceed income by 2020, but combined trust fund reserves are growing and expected to continue to grow until then
  • Without action by Congress, trust fund reserves will be gone by 2033
  • Over the system’s 75-year long-range period, the projected actuarial deficit is 2.72 percent of taxable payroll, a 0.05 percent increase from 2012.
     

Social Security Trustees Call for Action by Congress

While expected depletion dates are unchanged and there will be funds to pay three-fourths or more of benefits due, “the fact remains Congress needs to act to ensure the long-term solvency of this vital program,” said Carolyn Colvin, Social Security’s acting commissioner.

With Disability Insurance Trust Fund money expected to dry up in less than three years, Congress needs to act soon to address this financial imbalance, she said.

The trustees’ report also noted:

  • Some 161 million people paid payroll taxes in 2012 and were covered by Social Security
  • There were fifty-seven million Social Security beneficiaries at the end of calendar year 2012, receiving $775 billion
  • Combined OASDI Trust Funds income totaled $840 billion in 2012
  • Combined OASDI Trust Funds expenses totaled $786 billion in 2012
  • Combined trust funds asset reserves increased by $54 billion in 2012, totaling $2.73 trillion
  • Non-interest income dipped below program costs for the first time in 27 years in 2010 and costs are expected to exceed non-interest income throughout the 75-year period
  • In 2012, it cost $6.3 billion to administer the program, 0.08 percent of total expenditures
     

Helping Florida workers and retirees with Social Security benefits problems is what our lawyers do at Johnson & Gilbert, P.A., serving Ormond Beach and the greater Daytona Beach area. Call us at 386.673.4412 or toll-free at 800.556.8890 for a free consultation.

Related Links: