Social Security says benefits could last longer than it thought
The agency projects an additional year of full funding
The Social Security Administration said benefits are now projected to last one year longer than previously thought. (iStock)
The Social Security Administration (SSA) released a new outlook for its trust funds, showing that Social Security benefits could last longer than originally projected.
Social Security funds are expected to deplete by 2035, one year later than the SSA previously predicted. When this happens, benefits paid out to Social Security recipients will be slashed by 20%.
The total combined assets of the OASI Trust Fund and DI Trust Fund decreased by $56 billion in 2021 to a total of $2.85 trillion. The total annual cost of the program is projected to exceed its total annual income in 2022. In fact, Social Security’s cost has been exceeding its income since 2010.
"It is important to strengthen Social Security for future generations," Social Security Acting Commissioner Kilolo Kijakazi said. "The Trustees recommend that lawmakers address the projected trust fund shortfalls in a timely way in order to phase in necessary changes gradually. Social Security will continue to be a vital part of the lives of 66 million beneficiaries and 182 million workers and their families during 2022."
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Social Security recipients could get benefit hike in 2023
While Social Security funds may be dwindling, benefits will likely go up before they drop.
Benefits are projected to climb by 10.5% next year due to a cost-of-living adjustment (COLA), according to a forecast from the Senior Citizens League. This increase would mark the highest jump since 1981, when recipients saw an 11.2% increase.
This projection is due to rising inflation, which is currently at a new 40-year high. The COLA is determined using the Consumer Price Index (CPI) inflation measurement tool from the Bureau of Labor Statistics (BLS). The CPI increased by 9.1% annually in June, hitting its highest point since November 1981.
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RETIREMENT SAVINGS PLAN CHANGES COULD BE COMING AFTER HOUSE PASSES NEW BILL
Bill introduced to protect future benefits
Although Social Security funds are projected to deplete by 2035, some members of Congress are working to ensure that benefits will not run out.
House Ways and Means Social Security Subcommittee Chairman John Larson, D-Conn., introduced "Social Security 2100: A Sacred Trust" at the end of 2021. If passed, the bill would provide a benefit bump and protect retirees against inflation.
"For too long, Congress has forsaken its duty to enhance benefits," Larson said. "With 10,000 Baby Boomers a day becoming eligible, and with Millennials needing Social Security more than any generation, the time for Congress to act is now."
Although the bill has hundreds of co-sponsors and endorsements from advocacy groups, it's struggled to gain bipartisan support.
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