By Alexander Douglas |Staff Writer|
Social Security trust funds for retirement and disability programs will be depleted by 2033.
When these trust funds are depleted, the annual revenue from payroll tax is projected to cover only 75 percent of benefits until 2088, according to the Social Security and Medicare Trustees’ 2014 report.
The youngest baby boomers will have reached age 67 by 2031, which is nearly double the number in 2008, according to CNBC.
Commissioner of the Social Security Administration, Carolyn Colvin, stressed the importance of the situation and stated, “I don’t want to be dramatic, but I’ve worked with this population my whole career. I think we would give them a death sentence.”
President Barack Obama’s 2016 budget proposed to reallocate funds from the Old-Age and Survivors Insurance Trust Fund and benefits would not be reduced after 2016, pushing the problems onto the old-age, which would not entirely alleviate the problem, according to Forbes magazine.
Studies from researchers at Harvard University and Dartmouth College found that the Social Security Administration has overstated the financial health of the program’s trust funds since 2000, according to USA Today.
“These biases are getting bigger and they are substantial. Social Security is going to be insolvent before everyone thinks,” stated Gary King researcher and co-author of the studies conducted at Harvard University.
The study calculates the unfunded obligations of Social Security with the “infinite horizon” method and estimates $24.9 trillion unfunded liabilities compared to $10.6 trillion projected in 2088.
“After 2000, forecast errors became increasingly biased, and in the same direction. Trustee Reports after 2000 all overestimated the assets in the program and overestimated solvency of the Trust Funds,” stated the study.
With the Social Security funds predicted to decrease, people are getting more worried that they won’t receive their full benefits.
“It’s poop. As a citizen, if we put in the work all these years I feel cheated,” said student Camilla Dabaneh.
According to U.S. News & World Report, people retire if they: don’t need the money, need the money, are in poor health or fear the government will lower benefits.
Many choose to retire at age 62, but doing so results in a reduction of around 30 percent to your benefits, according to the Social Security Administration.
About 10 retirees claim their Social Security benefits before they reach the age where they can collect full benefits, according to a survey by Franklin Templeton Investments.
Another problem is that people not close to retirement do not think about their Social Security.
“It’s never been a priority on my list,” said student Lukas Montes. “I never hear anyone talk about Social Security.”
More than half of Americans between ages 18 and 29 believe that Social Security will exist by their retirement, according to a poll from iOMe Challenge.
When told that her Social Security benefits would be cut, Dabaneh asked, “If older generations work just as much as us and they get more money, how is that fair to us?”