Will Social Security Run Out Before You Die? Part 2
The social security surplus is projected to run out by 2034. Then, unless stopped, the Social Security administration will only be able to pay the benefits supported by current Social Security taxes. A similar run-out may run much sooner for those who get Social Security disability payments. The trust fund that supports disability insurance may run out next year. Thus, many are asking – will social security run out before you die?
A sudden drop to 79% of benefits is no small thing. It is a brutal cut for many retired people who rely on Social Security. Addressing a funding shortfall isn’t as difficult as stopping the system from going all the way to paying zero. There is a gap between what Social Security promises to pay and what it will collect. It amounts to about 1.2% of GDP in 2035. Fortunately, that’s a fixable problem (except for the politics). Over the next decade, annual spending on everything besides Social Security and health care programs should shrink by 1.7%.
The government is however making proposals to keep Social Security on track for the longer term. These promise to pay less by further raising the retirement age or adjusting benefit formulas. Or, they promise to raise taxes on higher earners. Think of 2034 as the rough political deadline for Congress to make sure that in the question of “Will social security run out?” that the answer is “No”.