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gyuris
Joined 2007
Posts: 366

Social Security Is Running Out of Money Faster Than Projected Last Year

12 years ago

This may be of interest to US Social Security retirees and those close to getting it:

++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
* Social Security Is Running Out of Money Faster Than Projected Last Year*

April 25, 2012

The Social Security Board of Trustees 2012 report released this week shows a
significant increase in the program's deficit over projections from just a year ago.

Specifically, combined assets in the Old-Age and Survivors Insurance, and
Disability Insurance (OASDI) Trust Funds will be depleted three years earlier
than projected last year -- from 2036 to 2033. Disability Insurance Trust

Funds will be exhausted in 2016, rather than in 2018 as estimated last year.

*What is causing Social Security's defict, and what can be done about it? *

A new brief from the The Center for Retirement Research at Boston College

provides some perspective, stating: "While the deficit is larger and the date of exhaustion nearer, the story remains the same. The program faces a manageable financing shortfall over the next 75 years, which should be addressed soon to restore confidence in the nation's major retirement program and to give people
time to adjust to needed changes."

* Demographic Changes*

"Since Social Security is financed primarily on a pay-as-you-go basis, demographic trends are very important. And the demographics are changing dramatically; the baby boomers are retiring and the ratio of beneficiaries to
workers is increasing sharply....While the long-term demographic outlook for Social Security has not changed, the program's finances have been hurt by the

recession and slow recovery," the brief states.

*Temporary Reduction in Social Security Payroll Tax*

"The Middle Class Tax Relief and Job Creation Act of 2012 extended the
"temporary" 2-percentage-point reduction in the Social Security payroll tax rate

for employees and the self employed through the end of 2012. The law provides

that the Treasury make up for this reduction by reimbursing the trust funds with

general revenues. Thus, the law has no financial implications for Social

Security's short- or long-term outlook. The question is whether Congress will

let the tax reduction expire as planned," says the brief's authors.

The brief provides an extensive analysis with graphs and charts, and also

discusses two issues that Congress will be forced to consider -- the projected

exhaustion of the Disability Insurance Trust Fund in 2016 and the

2-percentage-point reduction in the employee's portion of the payroll tax.

To download the brief (7-page PDF), go to:
href="http://crr.bc.edu/wp-content/uploads/2012/04/IB_12-9.pdf">http://crr.bc.edu/wp-content/uploads/2012/04/IB_12-9.pdf

To download the full 2012 Social Security Trustees Report (252-page PDF), go to:

http://www.ssa.gov/oact/tr/2012/tr2012.pdf

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