The Social Security trust fund — which most Americans rely on for their retirement — only has about 12 years left before it runs out, the Treasury Department said Tuesday
Is Social Security running out?
In its annual report, the Treasury Department said the trust fund will be running out one year earlier than expected. This change was spurred by the coronavirus pandemic, according to CNBC.
The Treasury Department uses both the Old-Age and Survivors Insurance and the Disability Insurance trust funds to provide income for former workers who retired and those who can’t work because of disabilities.
- Well, the Old-Age and Survivors Insurance will pay scheduled payments through 2033.
- The Disability Insurance Trust Fund will pay through 2057.
By that time, Social Security will only have enough funds to pay 78% of promised benefits to retirees and people with disabilities, according to CNN.
Why is Social Security running out?
The changes were spurred by the COVID-19 recession, according to NPR. More people had to retire or leave their jobs, which led to more payments. Now, Social Security will be using its savings to pay out benefits to people.
Is Biden adding to Social Security?
The Biden administration is aware of what’s happening and has pledged to help Social Security over the long term.
- “The Biden-Harris administration is committed to safeguarding these programs and ensuring they continue to deliver economic security and health care to older Americans,” Treasury Secretary Janet Yellen said in a statement, per NPR.
It’s still unclear what the long-term impacts of the pandemic will be and how it will change Social Security benefits even more, according to CNN. It’s also unclear how the Biden administration plans to counter this trend.