Social Security is funded by current workers’ payroll taxes paying current retirees’ benefits. The system depends on a larger working-age population than the retired population. The retirement trust fund is projected to run dry in 2032, after which benefits must be reduced. The Old-Age and Survivors Insurance Trust Fund holds $2.3 trillion in special-issue Treasury securities and is used when payroll-tax revenue falls short of benefit obligations. Payroll-tax shortfalls have occurred every year since 2010. After depletion, incoming payroll taxes are expected to cover about 77% of scheduled benefits, and the law triggers an automatic across-the-board cut of roughly 23–28%.
"Incoming payroll taxes will cover 77% of total scheduled benefits, and the law triggers an automatic, across-the-board cut of about 23-28% on every retiree's check the day after depletion. Your Social Security check is going to go down from $2,000 to $1,440. And by then, the cost of living is probably not going to cooperate either."
#social-security #retirement-benefits #trust-fund-depletion #payroll-taxes #cost-of-living-adjustment
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