A stronger-than-expected economic recovery from the pandemic has pushed back the go-broke dates for Social Security and Medicare, but officials warn that the current economic turbulence is putting additional pressures on the bedrock retirement programs.
The annual Social Security and Medicare trustees report released Thursday says Social Security’s trust fund will be unable to pay full benefits beginning in 2035, instead of last year’s estimate of 2034. The year before that it estimated an exhaustion date of 2035.
Forecasters said in the report that the ongoing COVID-19 pandemic will have no net effect on their long-range projections. But they also noted that assumptions for their latest report were made in February, which was before cases began climbing again nationally and inflation rose even higher. A main source of financing is payroll taxes on earnings paid by employees and employers. About 183 million people paid those taxes in 2021.
The trustees report is an added reminder of the U.S. government’s financial troubles, as it juggles historically high inflation, recovery from a pandemic and the war in Ukraine. Ron Thompson Jr, a 24 year-old D.C. resident, says this year’s cost of living increase has been “transformational” as a trickle-down benefit to his family, as he helps take care of his 77-year-old grandmother, who lives on the other side of town.
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