Social Security and the Medicare Board of Trustees say that full Social Security benefits are expected to run out in 2035, according to an annual report.
That's a slight upgrade from last year's analysis, which projected Social Security to run out by 2034. Despite the 11-year warning, Commissioner of Social Security Martin O'Malley called the report "a measure of good news" for millions of Americans who depend on the program.
"More people are contributing to Social Security, thanks to strong economic policies that have yielded impressive wage growth, historic job creation, and a steady, low unemployment rate. So long as Americans across our country continue to work, Social Security can — and will — continue to pay benefits," O'Malley said in a statement.
O'Malley said he will continue to urge Congress to protect and support Social Security and restore the growth of the funds. If nothing is done, Social Security will not be able to pay full benefits by 2035. The report projects income sources will only be able to cover 83% of benefits owed.
"Eliminating the shortfall will bring peace of mind to Social Security's 70 million-plus beneficiaries, the 180 million workers and their families who contribute to Social Security, and the entire nation," said O'Malley.
"Whether Congress chooses to eliminate the shortfall by increasing revenue, reducing benefits, or some combination, is a matter of political preference, not affordability," he added. "Congress currently has several bills that address the shortfall without benefit cuts -- it should debate and vote on these and any other proposals. It's critical that Congress acts quickly to address the projected trust fund shortfalls, to gradually phase in necessary changes as the Trustees have recommended."
According to the report, Social Security paid benefits of $1.379 trillion in 2023. There were about 67 million beneficiaries at the end of the calendar year. During the year, an estimated 183 million people had earnings covered by Social Security and paid payroll taxes on those earnings. The total cost of the program in 2023 was $1,392 billion, and the total income was $1,351 billion.
The report anticipates that Social Security's total cost will be higher than its total income in 2024 and all years after. Total cost began to be higher than total income in 2021, and Social Security's cost has exceeded its non-interest income since 2010.
"Implementing changes sooner rather than later would allow more generations to share in the needed revenue increases or reductions in scheduled benefits," the report noted. "Social Security will play a critical role in the lives of 68 million beneficiaries and 184 million covered workers and their families during 2024. With informed discussion, creative thinking, and timely legislative action, Social Security can continue to protect future generations."