Social Security's Dire Timeline Just Changed. Here's the Latest.

"Social Security is only designed to replace about 40% of the typical worker's pre-retirement earnings. And for many seniors, a 60% pay cut is a tough thing to absorb. But as hard as it may be to live on Social Security alone right now, things could even get harder for retirees who only have those benefits as income."

"The Social Security Trustees said last year that they expect the program's Old-Age and Survivors Insurance (OASI) Trust Fund, which pays retirement benefits, to be depleted by 2033. From there, the Trustees said that only 77% of scheduled benefits would be payable. But last month, the Congressional Budget Office (CBO) released its own analysis of the Social Security trust funds. And it projected that the OASI Trust Fund will be depleted in 2032 - a full year sooner."

"Under current law, the Social Security Administration (SSA) is not allowed to pay benefits that exceed the available balances in a program trust fund. The SSA also can't borrow money for a trust fund or transfer money from one trust fund to another. Lawmakers could vote to combine Social Security's OASI and Disability Insurance Trust Fund to push off benefit cuts."

Millions of older Americans rely primarily or exclusively on Social Security for retirement income, despite the program being designed to replace only 40% of pre-retirement earnings. Social Security faces a serious revenue shortfall that will necessitate benefit cuts. The Congressional Budget Office recently projected that the Old-Age and Survivors Insurance Trust Fund will deplete one year earlier than previously estimated by Social Security Trustees—in 2032 rather than 2033. Upon depletion, only 77% of scheduled benefits will be payable. Current law prohibits the Social Security Administration from paying benefits exceeding available trust fund balances or borrowing funds. Lawmakers could potentially combine Social Security's trust funds to delay benefit cuts.

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