Social Security to tap reserves to cover 2018 benefits

Social Security to tap reserves to cover 2018 benefits

The main trust fund behind Medicare, the USA health-care program for the elderly and disabled, will be exhausted in 2026, three years earlier than was projected a year ago, the government said Tuesday. That is three years earlier than projected last year, Marketwatch noted.

The Social Security program's costs are expected to exceed its income this year, marking the first time that has happened since 1982 and forcing the USA government to dip into the retirement system's trust fund to pay benefits to participants.

That's what the Social Security and Medicare trustees projected in their 2018 annual report released Tuesday. Continuing payroll tax revenues to the combined trust funds would be sufficient to cover 79 percent of scheduled benefits starting in 2034. Asset reserves as of 2017 were $2.9 trillion.

In reality, it has been running annual deficits since 2010, and the insolvency date has moved up eight years.As the Social Security crisis keeps getting closer, the political parties are moving further away from doing anything about it.What's scary is that Social Security is relatively easy to fix when compared to Medicare, a program where the rising retirement population is interacting with growing healthcare costs. But when interest income is excluded from the equation, program costs exceed income throughout the 75-year projection period.

Each year, the trustees project the long-term finances of Medicare, which covers about 58 million Americans. Some 45 million retirees and six million dependents receive Social Security benefits.

A separate projection released on Tuesday showed it will become insolvent in 2034 - the same estimate as past year.

"The programs remain secure", he said, adding: "The administration's economic agenda - tax cuts, regulatory reform, and improved trade agreements - will generate the long-term growth needed to help secure these programs and lead them to a more stable path". Some combination of revenue increases and benefit changes could also eliminate the projected shortfall. Taken separately, the fund for retirees is now expected to be depleted in 2034, a year earlier than last year's report, while the disability insurance reserves run out in 2032, four years later than projected last year. The program's cost will rise more rapidly through 2039 as the baby-boom generation retires faster than the number of covered workers increases, according to the report.

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