The Social Security Board of Trustees has released its annual report on the financial status of the Social Security Trust Funds.
According to the update, the combined asset reserves of the Old-Age and Survivors Insurance and Disability Insurance Trust Funds are projected to become depleted in 2035, one year later than projected last year. At that time, presuming no legislative changes are made, 80% of benefits would still be payable.
Specifically, the OASI Trust Fund is projected to become depleted in 2034, one year later than last year’s estimate, with 77% of benefits payable at that time. On the other hand, the DI Trust Fund asset reserves are not currently projected to become depleted during the 75-year projection period.
In dollar figures, the asset reserves of the combined OASI and DI Trust Funds declined by $56 billion in 2021 to a total of $2.852 trillion. Moving forward, the total annual cost of the program is projected to exceed total annual income in 2022 and remain higher throughout the 75-year projection period.
As noted in the update report, total costs began to be higher than total income in 2021. Social Security’s costs have exceeded non-interest income since 2010.
“It is important to strengthen Social Security for future generations. The Trustees recommend that lawmakers address the projected trust fund shortfalls in a timely way in order to phase in necessary changes gradually,” says Kilolo Kijakazi, acting commissioner of Social Security. “Social Security will continue to be a vital part of the lives of 66 million beneficiaries and 182 million workers and their families during 2022.”
Other highlights of the Trustees Report show total income, including interest, to the combined OASI and DI Trust Funds amounted to $1.088 trillion in 2021. This includes $980.6 billion from net payroll tax contributions, $37.6 billion from taxation of benefits and $70.1 billion in interest. Total expenditures from the combined OASI and DI Trust Funds amounted to nearly $1.145 trillion in 2021.
Social Security paid benefits of $1.133 trillion in calendar year 2021. There were about 65 million beneficiaries at the end of the calendar year.
The projected actuarial deficit over the 75-year long-range period is 3.42% of taxable payroll. This is lower than the 3.54% projected in last year’s report.
During 2021, an estimated 179 million people had earnings covered by Social Security and paid payroll taxes, and the cost of $6.5 billion to administer the Social Security program in 2021 was 0.6% percent of total expenditures.