Social Security Update: Highlights from the 2009 Social Security Trustees Report
Each year, the Board of Trustees of the Social Security Trust Funds provides a report to Congress, which is available to the public.
This report gives detailed information about the current status of the funds, their projected condition over the next 75 years, and how long Social Security will be solvent.
Social Security in Jeopardy
The 2009 Social Security Trustees Report report doesn't offer any good news.
Social Security is still running out of money, just faster than anticipated five years ago.
Key points from the 2009 report include:
According to the trustees report, Social Security cannot continue to offer the same benefits over the long term unless Congress:
The reason is simple: the number of people paying into the program continues to shrink while the number of people eligible to receive benefits is growing rapidly, mainly due to the high number of boomers who are reaching retirement age.
The Fix? Raise Social Security Taxes or Decrease Social Security Benefits
In the 2009 annual Social Security report, the trustees suggest two options (or some combination of both) to balance the Social Security budget over the next 75 years:
The trustees also report that additional program changes will be required beyond the next 75 years because our increasing longevity means more people will receive benefits over a longer time.
This report gives detailed information about the current status of the funds, their projected condition over the next 75 years, and how long Social Security will be solvent.
Social Security in Jeopardy
The 2009 Social Security Trustees Report report doesn't offer any good news.
Social Security is still running out of money, just faster than anticipated five years ago.
Key points from the 2009 report include:
- Social Security's annual surpluses of tax income over expenditures are expected to fall sharply this year and to stay about constant in 2010 because of the economic recession.
- The surplus is expected to rise briefly before declining and turning to cash flow deficits beginning in 2016.
- When Social Security funds reach the deficit point the difference will be made up by taking the reserve funds.
- Social Security reserve funds will be exhausted by 2037. This is five years earlier than Social Security Trust Fund reports of only a few years ago.
According to the trustees report, Social Security cannot continue to offer the same benefits over the long term unless Congress:
- Increases Social Security taxes
- Changes the way the program is financed
- Significantly alters eligibility requirements
The reason is simple: the number of people paying into the program continues to shrink while the number of people eligible to receive benefits is growing rapidly, mainly due to the high number of boomers who are reaching retirement age.
The Fix? Raise Social Security Taxes or Decrease Social Security Benefits
In the 2009 annual Social Security report, the trustees suggest two options (or some combination of both) to balance the Social Security budget over the next 75 years:
- An immediate 16 percent increase in the payroll tax (from a rate of 12.4 percent to 14.4 percent)
- An immediate 13 percent reduction in benefits
The trustees also report that additional program changes will be required beyond the next 75 years because our increasing longevity means more people will receive benefits over a longer time.
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