U.S. Social Security Trust Funds: There is Optimism

The U.S. Social Security Trust Funds remain in jeopardy, but a recent report finds that all has not been worse than expected.

In fact, Americans could stop collecting full benefits in 2035, a year later than projected in the 2023 report.

This is revealed in the State of the U.S. Social Security Trust Funds report issued May 6.

The report, which is submitted to Congress every year, indicates that the combined asset reserves of the Social Security Old-Age and Survivors Trust Funds and those intended to pay the disabled will only be able to pay 83% of benefits beginning in 2035.

This is 3% more than the 2023 report forecasts.

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Also, the Social Security agency announced a series of changes that will streamline bureaucratic processes and allow more people to receive Supplemental Security Income (SSI).

But they will also increase payments to those already benefiting from the program for those over 65, children and the disabled.

With a recovering economy, low unemployment and rising wages are the reasons why this year is a bright spot in the face of the possibilities of the Social Security Trust Funds running out, which as close as in 11 years will not be able to pay the full check to beneficiaries.

U.S. Social Security Trust Funds: There is Optimism

Despite this, Social Security Commissioner Martin O’Malley, was optimistic about the projections, although he called on policymakers to take action immediately.

“As long as Americans continue to work, Social Security can, and will, continue to pay benefits,” he said, noting that 50 percent of retirees depend on Social Security for their livelihood.

The commissioner expressed a concern similar to that expressed by a panel of economists and experts from the Brookings Institution who met in Miami in April to discuss the national debt and the possible bankruptcy of Social Security.

The cost of Social Security began to exceed revenue in 2021 and the alarm remains.

Social Security Trust Fund income, including interest, was $1.351 billion in 2023, while total expenses amounted to $1.392 billion.

Last year, 67 million people received Social Security income, which amounted to $1,379 million.

The longevity of the population and the low birth rate of Americans are some of the reasons behind Social Security’s funding situation, said Evelyn Linares , spokeswoman for the Social Security Office in Miami-Dade.

“It’s a wake-up call to people to start preparing as soon as possible for retirement, because they can’t rely solely on Social Security income,” Linares said.

The average retirement currently is $3,822, Linares said.

This falls short of the rising cost of living and housing, especially in Miami, the metropolitan area of the country most affected by inflation.

Hispanics are not prepared to face a cut in their retirement checks.

The balance in their retirement savings accounts is six times smaller than that of Anglo households, Lisa M. Gomez, assistant secretary of the Employee Benefits Security Administration, told the Herald in January.

Linares used the occasion to warn about the rising incidence of fraud, in calls and letters to the public on behalf of the Social Security Trust Funds.

“They are making robo calls, imitating Social Security numbers,” he said.

Remember that Social Security offices prefer to communicate by letter with beneficiaries, so they always warn of calls, but scammers have refined their technique and are copying the Social Security logo on the letters, Linares said.