The Looming Social Security Crisis: 7 Things You Need To Know

Will Social Security be there when you retire? Will the looming Social Security Crisis ever be resolved? Here is what you need to know.

Social Security is a major unfunded liability. Younger generations are skeptical that Social Security will not be there to support them when they reach retirement age. You need to know seven things about the looming Social Security crisis.

“Social Security is a secure way to find great pleasure in being terribly decieved.” - Ernie J Zelinski

The Looming Social Security Crisis

The final year that Social Security had a surplus in funds was 2009. That was fifteen years ago. The program has continued operating on a cash-flow deficit since 2010.

The Social Security Trustees project a $1.8 trillion cash-flow deficit by 2030. Social Security will have to reduce the trust fund reserves to $864 billion.

Due to continual optimism, financial mismanagement, and positive spin, people may believe they will still receive Social Security when they retire. However, Millennials and younger generations are skeptical that they will receive Social Security.

Are younger people correct in their pessimism? Or is everything rosy? The Social Security Trustees’ reports spin a positive message even though the information and data are very sickly upon closer inspection.

2022 Social Security Trustees’ Report

To make matters even worse, the Social Security Administration has admitted that It will run out of funds by 2034. However, that was before the COVID-19 pandemic, which caused Social Security to dip into more of its funds. 

Now, the Social Security and Medicare Board of Trustees projects the “cost of both programs [Social Security and Medicare] will grow faster than gross domestic product (GDP) through the mid-2030s primarily due to the rapid aging of the U.S. population.”

This is a result of an aging population. The demographic issue is that not enough people are working or being born to cover the cost of Social Security. 

The Bipartisan Policy Center now projects that Social Security will likely be depleted by 2028. 

That is only four years away. 

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2023 Social Security Trustees’ Report

According to the Social Security Trustees’ 2023 annual report, the social program will have a cash-flow deficit of $119 billion.

Social Security continues to deal with a cashflow shortfall over the long-term. This is a result of the population aging.

The financial health of Social Security— unsurprisingly— continues to detoriate. The Social Security Trustees’ estimate that the trust funds will be insolvent by 2033. That means Social Security is only nine years away from insolvency. Once Social Security is officially insolvent, retirress will experience a 20% cut in benefits received.

How would you feel knowing that the money that was directly taken from your monthly paycheck that you were promised was reduced or completely eliminated?