What’s Really Going to Happen When Social Security Runs Out of Money
While both Presidential candidates maintained their distance from what was once known as the "third rail of politics," it might be time to take a reasoned look at what is happening to the ability of Social Security to meet its obligations in the future.
It’s a bit of a perfect storm for the Old-Age Survivors and Disability Insurance (OASDI) trust fund. Baby boomers retiring en masse means larger expenses for the fund. Fewer babies per family result in a smaller pool of workers to support those who require benefits. Mix in events like the Great Recession and the COVID-19 pandemic, and it’s easy to see why the fund is struggling.
According to the latest report, the OASDI trust fund sits at roughly $2.8 Trillion. Expenses already exceed both tax revenues and interest income combined. So the trust fund is steadily being depleted and is estimated to run dry in 2034. This fact leads the following questions:
- What Happens When The Money Runs Out?
- Should I Assume Social Security Will Be Gone When I Retire?
- What Would It Take to Fix It?
- How’s It Going to Play Out?
Here's a reasonable discussion of the answers to those questions.