Each year, trustees that oversee the Social Security trust fund release a report that shares the financial health of the program. According to the 2012 report, which was released yesterday, the trust fund will run dry by 2033. The year projected is three years earlier than projected last year.
The main cause of the earlier projection is due to high energy costs and the suppression of workers’ wages. Experts see these trends only continuing in years to come. In addition, experts predict that workers will be working fewer hours in the future which will lower payroll tax receipts. Payroll tax receipts support the Social Security trust fund, therefore, if there are fewer workers working fewer hours, there will be fewer dollars being put into the fund.
All of the above is true for both Social Security funds combined. Social Security is split up into two funds. One fund for retirement and survivor benefits and one for disability. Own it’s own, the retirement fund is expected to run out by 2035 and the disability fund by 2016.
- Social Security Quickly Dwindling (The Tennessean)
- Social Security and Medicare Could Run Out Sooner Than Expected (ABC News Blog)
- Is Social Securty Exhausted? Not at all (Reuters)