The Trustees Have Spoken…Let’s Look at the Numbers - AMAC Foundation; Social Security Administration

As noted last week on this site, the Social Security Board of Trustees has published its report on the program’s 2024 operations. As expected, the bottom line highlights further deterioration in Social Security’s reserve funding status, with the forecasted depletion date for the Old-Age and Survivors Insurance (OASI) Trust Fund now advanced three quarters from last year’s projection. The Disability Insurance (DI) Trust Fund remains able to pay projected claims throughout the entire forecast period, while hypothetically combining the two trust funds would offer a slight improvement, extending the ability of the combined balances to meet promised obligations through 2034.

As the various financial institutions and policy pundits weigh in on Social Security’s continually degrading financial condition, you’ll see conflicting reports on what the “endpoint” would be for full benefit payments absent corrective action. Some will say 2033, while others will say 2034, but the focus needs to remain on the reality that the OASI trust fund is projected to be exhausted at the start of 2033, which is now less than eight years away. The one-year difference relates to the combination of the OASI and DI trust fund balances, which can’t occur under current law and would provide only a fleeting reprieve, even if it were possible. Make no mistake…2033 is the deadline to keep in focus.

So, although the year-over-year insolvency schedule change is relatively slight, what are the reasons? According to the Trustees’ Summary message, the January 2025 enactment of the Social Security Fairness Act was the most significant cause for the advancement of the insolvency date; the increased benefit projections and the application of retroactivity to January 2024 accelerated the decline in program reserves. The Trustees also cited changes in the fertility rates assumed in last year’s forecasts, forecasting that the birth rate for women is not expected to recover from the 2023 low point (1.62) to an ultimate level of 1.9 until 2050, 10 years later than the projection made last year. Finally, changes to the workforce’s expected contribution to gross domestic product (GDP) resulting from an aging labor force have impacted the long-term forecasts.

The full 2025 Trustees report provides a wealth of data on Social Security’s future, as well as tremendous insights into the actuarial projections used to asses the program’s financial condition. All that aside, though, the Report’s conclusion sets the tone for upcoming congressional work on this critical problem: “The Trustees recommend that lawmakers address the projected trust fund shortfalls in a timely way in order to phase in necessary changes gradually and give workers and beneficiaries time to adjust. Implementing changes sooner rather than later would allow more generations to share in the needed
revenue increases or reductions in scheduled benefits.”

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