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People tend to think of their Social Security benefits as an actual account, in their name, which contains cash or investments. In reality, the Social Security trust fund contains nothing more than IOUs that have no value beyond a promise to impose higher taxes on future workers. The annual surpluses that many thought were being used to build up a reserve for Baby Boomers have been spent on other government programs or to reduce government debt.
Social Security has been spending more than it has been taking in since 2010, and that imbalance is expected to worsen
Source: Social Security and Medicare Boards of Trustees.
Time is running out on the Social Security Disability Insurance program (SSDI).
Unless Washington acts, it will be depleted by late 2016, according to Social Security and Medicare trustees. Its latest report concludes that SSDI “satisfies neither the Trustees’ long-range test of close actuarial balance nor their short-range test of financial adequacy and faces the most immediate financing shortfall of any” of the entitlement programs.
The trustees’ report finds that two other major entitlement programs remain in bad financial shape.
Unless it’s reformed, starting in 2033, Social Security will be unable to make full payments to recipients. From then on, it will only be able to pay “about three-quarters of scheduled benefits.”
The bottom line is:
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