Conclusion
Under the intermediate assumptions, the projected hypothetical combined
OASI and DI Trust Fund asset reserves become depleted and unable to pay
scheduled benefits in full on a timely basis in 2035. At the time of depletion
of these combined reserves, continuing income to the combined trust funds
would be sufficient to pay 80 percent of scheduled benefits. The OASI Trust
Fund reserves are projected to become depleted in 2034, at which time OASI
income would be sufficient to pay 77 percent of OASI scheduled benefits. DI
Trust Fund asset reserves are not projected to become depleted during the
75-year period ending in 2096.
Lawmakers have a broad continuum of policy options that would close or
reduce Social Security's long-term financing shortfall. Cost estimates for
many such policy options are available at
www.ssa.gov/OACT/solvency/provisions/.
See attached report:
It's unlikely this would be allowed to happen organically - there are too many ways to shore it up and it's a political hot rail. But, there is that Republican position paper that advocates getting rid of both Social Security and Medicare in five years. I guess that would solve this problem, other than the countless people that would be harmed. That said, pensions are mostly a thing of the past and folks are on their own to invest in their employers' retirement plans, or suffer the consequences later if they don't. So, that actually happened.
I tell my clients to never rely on just SS/Medicare to retire. Save and invest wisely in your future. Some retirement advisors tell folks to rely on "guaranteed income" like SS, pensions, annuities. But pension funds fail (regularly), annuities are worthless when the backing insurance company goes bankrupt (or sells them to another company that fails). It happens more often than you think. Check your state's bailout fund page (good luck with that...). In neither case do you personally "own" that money, it's just a promise to pay you.
Save and invest wisely. Have multiple sources of funding your dream retirement, and thus less stress.
Maybe be prepared to do a little part-time work at something you *enjoy* doing, or start a little business on the side. The tax breaks, being able to write off things like your internet, cell phone, mileage, maybe home office are great. Here's what I helped a few of my clients do:
A former nurse start a business in their garage buying up old furniture at estate sales, yard/garage sales, Goodwill, Salvation army and refinish/flip it (and another guy the same, but with old golf clubs).
A former IT manager to start a blog on their passion (horseback riding) and start bringing in passive ad and affiliate income.
Cement plan worker doing part-time auto detailing in their driveway (they love cars and are very type-A cleanliness oriented!).
Someone who was spending all their time watching QVC and Home Shopping Network is now a call-center sales consultant from their living room recliner, when they feel like working a little (they love it!)
This is a big pillar of the FIRE thing, especially the ones that can be done from less expensive countries with better nationalized health care, but it's a good way for regular retirement-aged folks to keep their minds engaged, have purpose, and meet new people. And tax write-offs 🙂
Morningstar (Rekenthaler) points out the very many ways that SS books could be balanced: How to Balance Social Security’s Book .
Steve Goss, SS Chief Actuary, appears unconcerned. He suggests that, like 1983, Congress will wait until the last minute and then pick one from column A, one from B, ...
And the recent version is described here: https://www.ssa.gov/news/press/releases/2023/#3-2023-3
Key projections as of December 2022:
"The OASI Trust Fund is projected to become depleted in 2033, one year sooner than last year’s estimate, with 77 percent of benefits payable at that time. The DI Trust Fund asset reserves are not projected to become depleted during the 75-year projection period."
