According to the annual trustees' report made public by the Treasury Department on Friday, the Social Security trust funds, on which around 67 million Americans rely for payments, are expected to run out in 2034, one year earlier than anticipated last year.
At that time, 80% of the planned benefits will be paid out of the combined funds for disability and old age and survivors insurance unless Congress takes action.
The trustees revised their predictions for the US economy to take into account most recent output and inflation data, which is when the new depletion date was announced. The outlook for the combined funds of Social Security was made worse by a 3% downward revision to the estimated levels of gross domestic product and labor productivity for the projected time period, according to the report.
The hospital insurance trust fund for Medicare will be able to cover all scheduled benefits until 2031, which is three years later than anticipated in the previous year's projection.
The programs, which Treasury Secretary Janet Yellen described as "bedrock services that older People rely upon for their retirement security," have come under increasing criticism following the release of the updated figures.
In a statement on Friday, Yellen stated that the Biden-Harris administration was committed to safeguarding the long-term stability of these important programs so that pensioners may receive the rewards they were due for their hard work.
The Hospital Insurance Trust Fund for Medicare, generally known as Medicare Part A, covers hospital, nursing home, and hospice services for qualified beneficiaries. The White House earlier this month unveiled a strategy to prolong the trust fund's viability.
By increasing the Medicare tax rate for incomes over $400,000 and removing loopholes that allow income to be sheltered from that tax, the proposal seeks to extend the hospital insurance fund for 25 years.
Yet, despite President Joe Biden's support for safeguarding and bolstering the program with his budget, the White House has not presented any concrete solutions to Social Security's funding problems.
AARP CEO Jo Ann Jenkins said in a statement on Friday that Congress "must take its responsibility to defend Social Security and Medicare seriously, by developing a comprehensive plan and doing it in a way that is accountable and completely transparent to the American public."
According to Joe Elsasser, a certified financial planner and the founder and president of Covisum, a social security claiming software company, it is generally still best to wait until full retirement age or later, despite the fact that news about closer depletion dates may encourage people to want to claim their benefits earlier.
Don't make benefit decisions out of fear, Elsasser advised. The majority of people will still be better off delaying, which will raise the size of their monthly benefit checks throughout retirement, even if a benefit cut does occur, according to Elsasser. Delaying one person's gain may be advantageous for couples in particular, he said.
You can determine how a benefit cut might affect your choice to file for Social Security by speaking with a financial advisor or using Social Security claiming software. Many individuals are astonished that delaying is still the wisest course of action, according to Elsasser.
In order to account for all possible scenarios, he advised that you evaluate your anticipated income against a full benefit decrease when you make retirement plans. If your assets are insufficient to maintain your standard of living even with a decrease, Elsasser advised considering modest lifestyle adjustments now, saving more money, or delaying retirement by one or two years to close the difference.
At that time, 80% of the planned benefits will be paid out of the combined funds for disability and old age and survivors insurance unless Congress takes action.
The trustees revised their predictions for the US economy to take into account most recent output and inflation data, which is when the new depletion date was announced. The outlook for the combined funds of Social Security was made worse by a 3% downward revision to the estimated levels of gross domestic product and labor productivity for the projected time period, according to the report.
The hospital insurance trust fund for Medicare will be able to cover all scheduled benefits until 2031, which is three years later than anticipated in the previous year's projection.
The programs, which Treasury Secretary Janet Yellen described as "bedrock services that older People rely upon for their retirement security," have come under increasing criticism following the release of the updated figures.
In a statement on Friday, Yellen stated that the Biden-Harris administration was committed to safeguarding the long-term stability of these important programs so that pensioners may receive the rewards they were due for their hard work.
The Hospital Insurance Trust Fund for Medicare, generally known as Medicare Part A, covers hospital, nursing home, and hospice services for qualified beneficiaries. The White House earlier this month unveiled a strategy to prolong the trust fund's viability.
By increasing the Medicare tax rate for incomes over $400,000 and removing loopholes that allow income to be sheltered from that tax, the proposal seeks to extend the hospital insurance fund for 25 years.
Yet, despite President Joe Biden's support for safeguarding and bolstering the program with his budget, the White House has not presented any concrete solutions to Social Security's funding problems.
AARP CEO Jo Ann Jenkins said in a statement on Friday that Congress "must take its responsibility to defend Social Security and Medicare seriously, by developing a comprehensive plan and doing it in a way that is accountable and completely transparent to the American public."
According to Joe Elsasser, a certified financial planner and the founder and president of Covisum, a social security claiming software company, it is generally still best to wait until full retirement age or later, despite the fact that news about closer depletion dates may encourage people to want to claim their benefits earlier.
Don't make benefit decisions out of fear, Elsasser advised. The majority of people will still be better off delaying, which will raise the size of their monthly benefit checks throughout retirement, even if a benefit cut does occur, according to Elsasser. Delaying one person's gain may be advantageous for couples in particular, he said.
You can determine how a benefit cut might affect your choice to file for Social Security by speaking with a financial advisor or using Social Security claiming software. Many individuals are astonished that delaying is still the wisest course of action, according to Elsasser.
In order to account for all possible scenarios, he advised that you evaluate your anticipated income against a full benefit decrease when you make retirement plans. If your assets are insufficient to maintain your standard of living even with a decrease, Elsasser advised considering modest lifestyle adjustments now, saving more money, or delaying retirement by one or two years to close the difference.
