Social Security to tap reserves to cover 2018 benefits

[KingsX]

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" The Social Security program’s costs will exceed its income this year for the first time since 1982, forcing the program to dip into its nearly $3 trillion trust fund to cover benefits.

This is three years sooner than expected a year ago, partly due to lower economic growth projections, according to the latest annual report the trustees of Social Security and Medicare released Tuesday. The program’s income comes from tax revenue and interest from its trust fund.

The trust fund will be depleted in 2034 and Social Security will no longer be able to pay its full scheduled benefits unless Congress takes action to shore up the program’s finances. Without any changes, recipients then would receive only about three-quarters of their scheduled benefits from incoming tax revenues."

more at link

https://www.foxbusiness.com/politics/social-security-to-tap-reserves-to-cover-2018-benefits



Social Security Expected to Dip Into Its Reserves This Year

" The total costs of Social Security will exceed total income this year for the first time since 1982, according to the annual Social Security and Medicare trustees report released on Tuesday, as funds for Medicare are expected to run dry earlier than expected.

While costs have exceeded net income since 2010, this is the first time in more than three decades that spending is expected to outweigh total income, by about $2 billion, meaning asset reserves will decline. Asset reserves as of 2017 were $2.9 trillion.

The trustees forecast that 100% of benefits will be covered through 2034, after which the trust funds for Social Security, which also cover old age and disability insurance programs, will only be able to cover about 79% of benefits.

The report also said that Medicare’s hospital insurance fund would be depleted in 2026, three years earlier than anticipated in last year’s report. Absent changes, the program then would be able to handle 91% of costs.

The nation’s aging population is boosting the costs of Social Security and Medicare, while revenue gains lag due to slower growth in the economy and the labor force. "

more at links

https://www.wsj.com/articles/social-security-expected-to-dip-into-its-reserves-this-year-1528223245

https://www.fedsmith.com/2018/06/05...erioration-social-security-medicare-finances/


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[Don M.]

Medicare and SS are both coming under increasing Stress. The withholding rates for SS have not been changed in decades, and with an increasing number of seniors, it's pretty obvious that this program is headed for problems. Unchecked rising prices for medical care and prescription drugs are sending Medicare towards real problems withing the next, very few years. A combination of our "For Profit" health care system, and millions of people who refuse to take good care of their health is a sure recipe for troubles within that program. The data at the CDC, for example, clearly shows that almost 1/3 of our nations health care issues...and costs...are closely related to Obesity.

Unless our politicians recognize these issues, and take action soon....such as raising the caps on SS, and moving towards a Universal health care system, much like the rest of the civilized world uses, it is pretty safe to assume that our primary social programs will not last very much longer, in their present forms.

 

[KingsX]

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I signed up for Medicare supplement Plan F this year... then recently I discovered this:

Per a new government law, in 2020 new enrollees will not be able to buy any Medicare supplements that reimburse the Medicare B deductible [like Plan F.]

Apparently this is meant to discourage seniors from using Medicare.


" The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) passed by Congress and signed into law on April 16, 2015 changed the law on various aspects of health care, including some Medicare Supplement plans. The new law states that on or after January 1, 2020, a Medicare Supplement policy that provides coverage of the Part B deductible may not be sold or issued to a newly eligible Medicare beneficiary... That means that people whose birthday is December 31, 1954 (turning 65 on December 31, 2019) may be the last group able to enroll in Medicare Supplement Plan F. After January 1, 2020, you will not be able to enroll in Medicare Supplement Plan C, one of the closest alternatives to Plan F, either, since it also covers the Part B deductible. If you already have Plan F, you can keep it. The law only affects new enrollees."

https://medicare.com/medicare-supplement/is-medicare-supplement-plan-f-going-away/

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[Ruthanne]

I'm glad I'll probably be dead by 2034.

 

[StarSong]

Reuters is not the only credible source claiming that the SS & Medicare sky isn't falling in on us quite yet.
https://www.reuters.com/article/us-...-and-medicare-are-not-insolvent-idUSKCN1J22OR

The opening paragraphs of this article:

"It happens like clockwork each year. The trustees of Social Security and Medicare issue their annual reports on the programs’ health, and doomsayers start talking about insolvency and bankruptcy. This year is no exception. The reports issued on Tuesday yielded wildly inaccurate news stories - amplified by the social media echo chamber - suggesting that Medicare and Social Security are headed for insolvency in the not-too-distant future - meaning that they would not be able to pay out the money owed for benefits.

It is true that Social Security and Medicare face financial challenges. But neither is headed for insolvency, bankruptcy or other dire futures. How do I know this? By taking a careful look at the trustee reports - and by considering the various parts of both programs, which have different funding sources and face different challenges."

KingsX, Unfortunately, I can't read or open the WSJ link because I'm not a subscriber to the publication.

 

[KingsX]

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Here is a major active bill now addressing this issue. But its passage is doubtful.

I like section 104 which increases the income threshold for taxing SS benefits.

https://www.congress.gov/bill/115th-congress/house-bill/1902/text

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[Phoenix]

The reason there is or ever has been a problem with covering costs for Social Security is because that money is always raided and spent on wars and the like.

 

[AZ Jim]

The reason there is or ever has been a problem with covering costs for Social Security is because that money is always raided and spent on wars and the like.

Exactly! If we could have kept congress out of the cookie jar we'd not be in this position. Most congressmen won't need SS so they are cavalier about ignoring the problem for you and me.

 

[Phoenix]

AZ Jim, you're right. Regular government employee don't pay into SS either. Congress is supposed to watch out for us. Some of them do, but for most of them, it's all about them. We are reaping the corruption right now.

 

[oldmontana]

The reason there is or ever has been a problem with covering costs for Social Security is because that money is always raided and spent on wars and the like.

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Spot on!


What happened to the lock box the Al Gore keep talking about?

 

[Manatee]

I'm glad I'll probably be dead by 2034.

I will be 100 in 2034. I have not scheduled "dead" as yet.

 

[Aunt Bea]

I don't understand, I don't think that there ever was a giant bag of cash at the Social Security Administration.

I've always been under the impression that the surplus money paid into SS each year was used by the government to fund day to day operations in exchange for special bonds/IOU's issued by the government and that the government pays out on those bonds as needed when the system takes in less than is paid out. That was one of the big arguments in favor of privatizing SS and discontinuing the issuance of government-backed IOU's. Allowing the funds to be invested in the United States financial markets was thought to be better than a safe full of promises from the government.

IMO the SS shortfall is nothing to worry about compared to the current 21 trillion dollar national debt.

 

[Don M.]

IMO the SS shortfall is nothing to worry about compared to the current 21 trillion dollar national debt.

For Sure! Fiscal Responsibility is a trait that seems to have become obsolete in Washington. Presently, our government has to pay over 300 billion/yr. just to cover the interest on that debt. That is money that does Nothing to benefit anyone other than the holders of these US bonds. This massive debt is the Primary reason for these ridiculously low interest rates on individual savings, etc. If the Fed was to allow the Fed funds rates to rise to a more normal 4 or 5%, the entire Federal budget would be going toward paying the interest on this huge debt. If our government doesn't start getting its finances in order, the day may well come when the US goes the way of nations like Argentina and Greece.