Social Security isn't bankrupt: What we know about future benefits based on the latest trustees report

Social Security isn't bankrupt: What we know about future benefits based on the latest trustees report  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  VIEW IN BROWSER | SUBSCRIBE WED, JUN 29, 2022 YOUR WEALTH Editor's Note The future of Social Security continues to remain uncertain, forcing people to wonder: "Will Social Security actually run out of money?" Here's a bit of good news to share: A new Social Security trustees report points to a slightly longer time horizon for the program's trust funds. But even with a new depletion date of 2035 (a year later than last year's report), over the 75-year projection period, Social Security faces an actuarial deficit of 3.42% of taxable payroll, decreased from the 3.54% figure projected last year. However, despite all the negative reports, the program is not bankrupt. To be sure, there are certainly a few reasons not to worry about the fate of Social Security. Payroll tax revenues will continue to cover a substantial portion of benefits even after the projected depletion dates, though replacement rates are expected to drop. Also, the current predictions for benefit cuts assume that Congress will not do anything to fix the issue before the trust funds run out in 2035. But there is a good chance lawmakers will be able to find some sort of solution before then to prevent cuts. The big question remains: Why does it seem like Social Security is always in trouble? Part of the problem can be attributed to longer life expectancies, a smaller working-age population and an increase in the number of retirees. By 2035, the number of Americans 65 and older will increase to more than 78 million, from about 56 million today. As a result, more people will be taking money out of the Social Security system — but there will be fewer people paying into it. Of course, that doesn't mean the program will run out of money entirely. As mentioned earlier, payroll taxes are expected to cover about 78% of scheduled benefits. But, if the funding gap isn't filled, retirees could get lower Social Security payments (it's projected that in 2035, just 80% of benefits will be payable, if no action is taken) or workers might need to pay more into the system. "We're getting into that area where immediate action will be required," said Alicia Munnell, director of the Center for Retirement Research at Boston College. For more cool stuff like this, be sure to visit CNBC's Financial Advisor Hub and CNBC + Acorns Invest in You: Ready. Set. Grow. Jim Pavia Money Editor @JIMPAVIA Social Security isn't bankrupt: What we know about future benefits based on the latest trustees report A later depletion date for Social Security's trust funds isn't anything to celebrate. But there are some nuggets of good news for beneficiaries in a new report. 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