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No, Social Security Isn’t Going Bankrupt

Social Security is a critical component of financial stability for retirees and disabled individuals in the United States. As recent governmental reports suggest, however, this vital program faces significant financial challenges that could affect its sustainability. Today, explores the financial projections for Social Security, its operational model, potential risks, and the importance of legal assistance when addressing your social security filing.

Financial Projections for Social Security Trust Funds

Social Security is financed through two primary trust funds:

  • The Old-Age and Survivors Insurance (OASI) Trust Fund: Supports retirees, their spouses, and children of deceased workers. The trust fund provides automatic spending authority to pay monthly benefits to retired-worker beneficiaries and their spouses and children and to survivors of deceased insured workers. With such spending authority, the Social Security Administration does not need to periodically request money from the Congress to pay benefits.
  • The Disability Insurance (DI) Trust Fund: Provides benefits to disabled workers and their families. Similarly to the OASI Trust Fund, the DI Trust Fund has spending authority, which allows it to pay monthly benefits to disabled workers and their families without having to request money from Congress.

These two trust funds grant the Social Security Administration a great deal of power within the federal government to operate accordingly. If there is concern about the future viability of the social security program, then where does that concern originate? 

Current Estimates and Future Outlook

The report from the U.S. Department of the Treasury, cited above, which was published on May 6th, 2024, indicates a worrying forecast for these funds:

  1. The OASI Trust Fund is now expected to only be able to fully pay out benefits until 2033, after which only 79% of benefits could be covered.
  2. Conversely, the DI Trust Fund appears more stable, with projections showing it can fully fund benefits through 2098. See page 10, section 1. Demography, to read the report yourself.
  3. Combining both funds extends the full payment capability to 2035, although legislative approval would be required to merge these funds.

Understanding the “Pay As You Go” System

Social Security operates on a “pay as you go” basis, which means it is primarily funded through ongoing payroll taxes collected from current workers and employers. This setup underscores the direct impact of current workforce dynamics on the availability of funds:

  • Tax Contributions: Both employees and employers contribute a dedicated payroll tax, which forms the bulk of the funding for benefits.
  • Taxation of Benefits: Some beneficiaries also pay taxes on their Social Security benefits, providing additional funding to the program.

Revenue Challenges and Expenditure Growth

  • Social Security’s income also includes interest earned on its trust fund reserves. However, since 2021, total annual costs have exceeded total income, leading to the gradual use of reserves to cover benefit payments.
  • The ongoing demographic shifts, such as an aging population and lower birth rates, exacerbate the funding challenges by reducing the worker-to-beneficiary ratio.

The Risks of Fund Depletion

While the depletion of Social Security’s trust funds does not mean the program will go bankrupt, it does signal potential reductions in benefit amounts. Here’s what could happen:

  • Post-Depletion Revenue: Even if the trust funds run out, Social Security would still collect taxes and pay out benefits, but these would likely be reduced to match incoming revenue.
  • Legislative Solutions: To prevent fund depletion and reduce potential benefit cuts, Congress needs to enact changes. Potential measures include raising the retirement age, increasing taxes, or both.

The Role of Legal Assistance

Navigating Social Security, especially when facing potential benefit adjustments or disputing overpayments, can be complex. Legal assistance is invaluable in these scenarios, offering:

  • Guidance on Appeals: Attorneys can help beneficiaries understand and navigate the appeals process effectively.
  • Protection of Rights: Legal professionals ensure that beneficiaries’ rights are upheld, particularly when changes to benefits or eligibility occur. These occurrences can sometimes be out of your control, so having a qualified social security attorney at your side is invaluable.
  • Support Through Changes: As legislative adjustments to Social Security are debated and implemented, having knowledgeable legal support can help beneficiaries adjust and plan accordingly.

Resources for You

Understanding the intricacies of Social Security is essential for current and future beneficiaries. As we navigate its challenges and anticipate future changes, informed decision-making supported by professional legal guidance becomes crucial. For those seeking more information or needing personalized legal assistance, our platform,, offers a wealth of resources and access to experienced attorneys ready to help you secure your benefits and navigate the complexities of the system.

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