The 2019 Social Security trustees’ report was released this week, detailing the financial status of one of America’s oldest, and most critical, social insurance programs. The report indicates that the trust funds supporting Social Security — Old-Age and Survivors Insurance (OASI) & Disability Insurance (DI)— face a combined exhaustion date of 2035. Additionally, the trustees project that the costs of the overall program will exceed the program’s income by 2020, later than previously expected.
Since its inception more than 80 years ago, Social Security has served as the foundation of retirement security in the United States. For many elderly Americans, Social Security provides crucial support, raising struggling households out of poverty. And yet, there is no question this safety net faces substantial financing challenges. Indeed, new projections from the program’s trustees suggest that if left unaddressed, Social Security’s trust funds are headed towards depletion. If that happened, it would translate to drastic benefit cuts for current and future beneficiaries.
The following questions and answers break down what you need to know about the program, in five charts:
The clear need to reform and strengthen Social Security presents an opportunity. The longer policymakers wait to implement reform, the more difficult and painful changes will have to be. A thoughtful package of reforms implemented soon could modernize the program, guarantee solvency of the program’s trust funds, and ensure those who need benefits most are taken care of. In fact, the comprehensive Social Security recommendations of BPC’s Commission on Retirement Security and Personal Savings offer policymakers a path to address these goals simultaneously. The Commission crafted consensus-driven, bipartisan recommendations to fulfill these objectives, summarized here and laid out in full detail in the commission’s June 2016 report. Many others have also put forward proposals aimed at reforming Social Security, some of which can be found here.
Moreover, policymakers should consider policies that address not only Social Security, but the challenges of retirement security in general. Such policy changes could include expanding access to workplace retirement savings plans, promoting personal savings for short-term needs (thus preserving retirement savings for older age), increasing utilization of approaches that would reduce the risk of retirees outliving savings, and improving financial capability among all Americans.
To draw attention to the bipartisan consensus around the need for retirement security reform, the Bipartisan Policy Center created the Funding Our Future campaign — a diverse coalition of educational and industry partners working to strengthen America’s retirement policies. Social Security is one of the three main pillars of the campaign. As the backbone of retirement planning and savings, our Social Security system’s finances needs to be addressed, for the sake of today’s seniors and for generations to come.
Learn more about the coalition and partner policy proposals here.
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