16.5 1950 2.3 2035 2.7 2021 The Bottom Line Active workers per Social Security recipient Source: Social Security Administration, 2021 Challenges of an Aging Population As the population ages, the ratio of workers (paying into Social Security) to retirees (receiving benefits) continues to fall. In most years prior to 2010, Social Security had annual surpluses, but they were not set aside to pay for future benefits. Rather, they were spent as part of the federal government’s general revenues, and “IOUs” were issued to the Social Security Administration in the form of financial accounts. These accounts are often referred to as the Social Security “trust funds.” Since 2010, Social Security outlays have consistently exceeded tax revenues. The program’s six- member Board of Trustees project that outlays will continue to exceed revenues on a regular basis. This means that Social Security will continue tapping the interest on trust fund assets to cover benefits. When you include the trust funds, Social Security should have sufficient resources to pay 100% of scheduled retiree benefits until 2034. Once the trust fund reserves are exhausted, payroll tax revenues would be sufficient to cover only about 78% of scheduled retiree benefits initially, but the percentage will decline to 74% by 2095 (based on the current formula).
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