WASHINGTON (LOOTPRESS) — Social Security will not be able to pay full monthly benefits to retirees and people with disabilities starting in 2034 unless Congress takes action to address a growing funding shortfall, according to a new report released Wednesday by the program’s trustees.
The combined Social Security trust funds, which provide benefits to the elderly, survivors, and people with disabilities, are now projected to run out of money in 2034—one year earlier than last year’s estimate. If no changes are made, the program will only be able to cover 81% of scheduled benefits at that time through payroll taxes and other income.
The earlier depletion date is due to several factors, including a law passed by Congress in 2023 that increased benefits for certain workers, as well as slower-than-expected recovery in the nation’s fertility rate. The report also cites slower projected growth in average worker earnings over the next decade.
Medicare’s financial outlook has also worsened. The program’s hospital insurance trust fund, which covers Medicare Part A, is now expected to be depleted by 2033, three years earlier than previously projected. After that, the program will only be able to pay 89% of covered services, including inpatient hospital care, hospice, short-term skilled nursing, and some home health services.
The accelerated depletion of Medicare funds is largely due to a rise in medical spending in 2024, which increased the outlook for future costs. The trustees also raised their expectations for growth in inpatient and hospice care use.
The findings highlight the urgent need for lawmakers to address the financial challenges facing two of the federal government’s most critical social safety net programs.
