Workers and retirees have long been warned that Social Security’s trust fund will run out of funds sometime in the future, and that the program has many trillions of dollars in unfunded obligations.
But what does this year’s 2019 Trustees Report, revealing $16.8 trillion in unfunded obligations over the next 75 years and insolvency in 2035, mean for current workers and retirees? (The $16.8 trillion figure includes the $13.9 trillion 75-year unfunded obligation, plus $2.9 trillion in trust fund IOUs that represent additional debt.)
Well, for starters, 2035 is only 16 years away. That means that anyone below the age of 52 today is on track to receive only 75% to 80% of their scheduled benefits.
But it’s not just younger workers who will receive benefit cuts. Consider people who are retiring in 2019 at age 62: Benefit cuts will kick in for them at age 78.
Social Security’s insolvency is not some far-off event. It will affect virtually all current and future workers and many of today’s current retirees.