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Reserves for Social Security’s largest trust fund are on track to run out as soon as 2033, a board of trustees of the program’s accounts said in a report on Friday.
The estimate is one year sooner than previously projected for the Old-Age and Survivors Insurance (OASI) Trust Fund, which pays out Social Security benefits to retirees, in the trustees’ report from last year. If the reserves are depleted, the report projected income for the account would only cover 77 percent of scheduled benefits.
By contrast, the board estimated the program’s smaller Disability Insurance (DI) Trust Fund would not become depleted for at least 75 years.
While both funds are separate, the accounts have usually been considered as a combined fund when discussing the program’s solvency. Lawmakers have also allowed inter-fund borrowing between accounts to temporarily extend solvency in the past.
The retirement and disability trust funds together could cover 100 percent of total scheduled benefits until 2034, according to the report, one year sooner than the board previously reported.
If both funds are depleted before Congress can act to replenish them, the government would only be able to cover 80 percent of scheduled benefits to retirees and disabled beneficiaries.
The board said it updated its projections after taking into account new inflation and output data, adding it also “revised down the levels of gross domestic product (GDP) and labor productivity by about 3 percent over the projection period.
