Retirement & Financial Planning Report

A recent report for Congress warns that without changes, Social Security will exhaust one of its trust funds only in three years from now and while the other is good for almost another 20 years, the program would be able to pay only about three-fourths of the benefits currently promised once that one is exhausted too.

The Congressional Budget Office’s assessment differed somewhat from other reviews of Social Security’s finances, including one by the program’s own actuaries, by taking into account what it considers to be more realistic numbers about trends such as life expectancies, population growth due to immigration and other factors, and income levels.


CBO projected that collectively the two trust funds, combined for analytical purposes, will be exhausted in 2031–for the disability insurance trust fund, 2017, and for the old age and survivors insurance trust fund, 2033. “For 2032, revenues are projected to equal 75 percent of scheduled outlays. Thus, payable benefits will be 25 percent less than scheduled benefits. For more than 20 years thereafter, the gap between scheduled and payable benefits will fluctuate narrowly around 26 percent.”

In the still longer term, payable benefits will be 34 percent smaller than scheduled benefits, CBO said.

It said the underlying problem is the same one often cited—the number of beneficiaries will increase as the baby-boom generation ages, rising life expectancy will cause payments to be made on average for longer than in the past, and that birth rates will not increase to produce more people paying into the system.