CBO's 2021 Long-Term Projections - THE LATEST

[GailL1]

For those who are interested - 

The CBO does some forecasting reports for the SS Trust Funds.

There was one in December 2020; another in March 2021 and now another in July 2021 -

Thus far NO official report on all the Trust Funds (including Medicare)  from the SS Actuary Office for this year - which are actual numbers from 2020 - how much came in & how much went out and balance of Trust Funds - including Medicare.  

Here are all of the above CBO forecast reports - available in Excel format.

CBO 07/08/2021 - CBO’s 2021 Long-Term Projections for Social Security: Additional Information 

Note category A-3

Benefit Reductions Needed to Achieve 75-Year Solvency for the Combined OASDI Trust Funds (% by year)

Benefit Reductions Needed to Achieve 75-Year Solvency for the Combined OASDI Trust Funds
Percent
Year Reduction Starts	For Current and Future Beneficiaries	For Future Beneficiaries Onlya
2022	30	36
2023	30	37
2024	30	37
2025	31	38
2026	31	39
2027	31	40
2028	31	41
2029	32	42
2030	32	43
2031	32	44
2032	33	45
Data source: Congressional Budget Office.
OASDI  = Old-Age, Survivors, and Disability Insurance (Social Security).

This is just a forecast - 🤑

[fffred]

@GailL1 

Ouch.

That's worse than what's been discussed in the past.

Thank you GailL for the information.

Edit:   yes, in the past the "conventional wisdom" seemed to be around a 23% decrease in benefits.

I read an article recently that discussed any decrease in benefits as possibly phased-in, such that those born up to "some year" (that I don't recall, but may have been 1964) would see no decrease in benefits, then progressively larger cuts for later those born later. Sounded good; still I can't see letting the up-to-1964 generation off the hook scott-free, we all need to share the pain.

[fffred]

I read this recent article that seemed "upbeat", maybe even "Pollyana-ish". 

https://www.usatoday.com/story/money/personalfinance/retirement/2021/07/18/social-security-cuts-what...

"Social Security benefit estimates for those born 1946 through 1964 should be on target and will be unlikely to be reduced if Congress fails to put a solution in place to shore up the reserve account within the overall trust fund, or fails to increase payroll taxes to support the commitments made to these retirees, says ..."

Big difference between 30% cut as of Jan 1 and this take. That just shows what may happen if there are no structural changes to Social Security's "income" side of the equation.

[GailL1]

Seems like the USAToday article is looking at the 2020 Trustee Report based on 2019 data and doesn't include much of what 2020 did to the program because of the pandemic.

1.  many people retired early (or earlier than they were planning) because of the pandemic (so more going out)

2.  many, many, many people were unemployed and paying NO payroll taxes (so less coming in)

3. Tax receipts on those who pay taxes on their benefits are probably lower too since this relies on "other income" in most cases - interest (CD) rates plummeted,  rental income may have been severely affected to name a few.

Plus we are already way down in the number of workers paying into the system - can we tax robots or machines?  A good idea ? - the automated machines can pay   (😀) yet they would receive no benefits - OK, maybe we could just throw them a bit of oil from time to time.

All I know for sure is some things are gonna change  - I just wanta know what and when.

[GailL1]

Whatever way we go - We have been warned for a very long time - at least 10 years (probably more).

Pretty much the same language since the 2010 Trustee Report.

Conclusion to 2020 Social Security Trustee Report 

Lawmakers have many policy options that would reduce or eliminate the long-term financing shortfalls in Social Security and Medicare. Lawmakers should address these financial challenges as soon as possible. Taking action sooner rather than later will permit consideration of a broader range of solutions and provide more time to phase in changes so that the public has adequate time to prepare.

Guess TIME has different meaning to different people.  But, hey, when you can print your own money . . . . . . . 😉