In early July, the Social Security Board of Trustees released its annual report on the long-term financial status of the Social Security Trust Funds. The trust funds are projected to become depleted in 2034, the same as they were projected last year. The total combined trust fund reserves will continue to grow until 2021, according to the annual report. But beginning in 2022, the total annual cost of the program is expected to exceed FICA tax collected from current workers. The surplus, which currently stands at $2.85 Trillion, will deplete to $0 by 2034 if Congress does not act before then. At that time, there will still be sufficient FICA tax revenue coming in to pay approximately 77% of scheduled benefits.
It is clearly time for Congress to act. The longer we wait, the harder the fix will be. Think of it in these terms, if you are flying from Cleveland to Los Angeles, it would be much easier for the pilot to make a minor mid-course correction over Chicago, than to wait until they were out over the Rockies to find out that they are hundreds of miles off course. The same is true with fixing the Social Security system. We strongly urge our friends and clients to be vocal with their Congressmen and Senators about coming up with a longer term solution for this very important social safety net program that people count on as part of their retirement foundation. If you have any questions regarding this, please do not hesitate to ask, as we monitor these developments on a regular basis to and for the benefit of our clients as they try to "Move Forward" towards a successful retirement.