The 2024 Social Security Trustees Report, released on May 6, 2024, paints a slightly better but still concerning picture for the long-term financial status of the Social Security program. According to the report:
- The Social Security Old-Age and Survivors Insurance (OASI) Trust Fund, which pays out retirement and survivor benefits, is projected to be depleted by 2033. Once the trust fund is exhausted, Social Security will only be able to pay 79% of scheduled benefits.
- The Social Security Disability Insurance (DI) Trust Fund, on the other hand, is not projected to run out over the 75-year projection window.
- The Medicare Hospital Insurance (HI) Trust Fund, which covers Part A expenses, is projected to become insolvent by 2036, five years later than reported last year. After insolvency, Medicare Part A will only be able to cover 89% of expenditures, resulting in an 11% cut to benefits.
The trustees cite several key changes in their assumptions this year, including higher labor productivity, lower disability claims, and lower fertility rates. However, these changes are not enough to stave off the looming insolvency of the OASI and HI trust funds. Addressing the long-term solvency of Social Security and Medicare will require difficult choices, such as raising taxes or cutting benefits. President Biden’s latest budget proposal aims to strengthen the Social Security Trust Fund by having the wealthy pay more, while Republican proposals have included raising the retirement age and cutting benefits. Ultimately, the future of these critical retirement programs will depend on the policy decisions made by the next administration and Congress. Retirees and future beneficiaries will be closely watching the political landscape to see how lawmakers address this pressing challenge.