A new federal report indicates that the Social Security trust fund, which helps pay benefits for millions, will be depleted by 2033.
According to an article from NPR, the Social Security trust fund is projected to be depleted by 2033. At that point, payroll taxes would only cover about 77% of promised retirement benefits, leading to automatic cuts unless there is an act by Congress. The accelerated timeline is due to increased benefits for public sector workforce retirees, lower expected wage growth and birth rates, and more people claiming benefits early.
From the article:
For each person drawing Social Security, there are now fewer young workers paying taxes to support the system. The trust fund, built up over decades when baby boomers were working, provides a backstop for now.
Without a change, more than 60 million people could face benefit cuts. According to AARP, roughly 1 million residents in Maryland receive Social Security benefits. Potential fixes discussed are raising taxes on high earners, adjusting the retirement age, or changing benefit formulas. A separate trust fund for disability payments is solvent through 2099, and combining the funds could extend overall solvency to 2034.
