The combined Social Security trust fund will become exhausted in 2034, one year earlier than previously anticipated, the program’s trustees projected on Wednesday.
A report from the trustees illustrates the long-term problems facing the entitlement programs on which tens of millions of people rely. Social Security is a popular retirement program that people can claim beginning at age 62. However, benefits increase the longer one waits to claim them, but they cap out at a retirement age of 70.
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The trustees predicted that the combined Social Security and Disability Insurance trust funds would only be enough to pay 81% of scheduled benefits sometime in 2034.
Treasury Secretary Scott Bessent said the report “underscores the need for lawmakers to take action to support the long-term viability of these programs.”
The bipartisan Social Security Fairness Act was the single biggest factor in pushing up the deadline, according to the trustees. The bill, which was signed into law by former President Joe Biden, increased benefits for people who receive pensions based on work not covered by Social Security.
Social Security is the single biggest source of federal spending, and the fast-approaching deadline is another reminder about the government’s precarious fiscal footing.
The trustees also updated their projections for Medicare’s insolvency.
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The exhaustion date for the Hospital Insurance trust fund, also known as Medicare Part A, was moved forward three years to 2033. At that point, the Medicare fund’s reserves will deplete, and the continuing program income will be enough to pay just 89% of total scheduled benefits.
Both political parties have been hesitant to discuss changes to Social Security and Medicare that would help keep them solvent as the deadlines fast approach.
“Today’s reports from the Social Security and Medicare Trustees confirm what we’ve long known: These cornerstone programs face serious and growing financial challenges that demand bipartisan leadership and urgent attention,” Margaret Spellings, president and CEO of the Bipartisan Policy Center, said in a statement.