Given the ongoing U.S. budget crisis, the structure and viability of entitlement programs are being closely scrutinized as reforms are contemplated. The government retirement insurance program, popularly known as Social Security, is formally titled the Federal Old-Age and Survivors Insurance (OASI) and Federal Disability Insurance Trust Funds (DI). OASI funds are paid to retirees and family members of deceased workers; DI funds are paid to disabled workers. Each is funded through separate allocations of payroll taxes, and the program is overseen by a board of trustees.
The main findings of the organization’s 2011 annual report include:
- In 2010, 54 million people were receiving Social Security benefits, while 157 million people were paying into the fund. Of those receiving benefits, 44 million were receiving retirement benefits and 10 million disability benefits. In 2011, there will be 56 million beneficiaries and 158 million workers paying in.
- In 2010, total income was $781.1 billion and expenditures were $712.5 billion, which meant a total net increase in assets of $68.6 billion. Assets in 2010 were $2.6 trillion, an amount that is expected to be adequate to cover the next 10 years.
- Disability funding will not to be able to meet costs beginning in 2013; it is expected to be exhausted by 2018 without legislative action. One approach to addressing this shortfall would be to reallocate the payroll tax.
- The costs of Social Security are expected to increase “more rapidly than non-interest income through 2035,” a consequence of the retirement of the baby-boom generation increasing the number of beneficiaries faster than growth in the labor force.
- In 1990, the total U.S. population was 261 million, with 32 million over age 65. That meant there were roughly five working-age people (ages 20 to 64) for every person of retirement age. By 2035, the population is expected to be 381 million, with 77 million over age 65. That means that the ratio of potential retirees to workers will be 37% — there will be less than three potential income earners for every retiree in the population.
- In 2023, total income and interest earned on assets are projected to no longer cover expenditures for Social Security. The trust fund would then be exhausted by 2036 without legislative action.
Tags: aging, Congress, law, retirement, campaign issue, Social Security