In 2018, an estimated $1.7 billion more in benefits will paid to eligible beneficiaries than is collected in revenue via the payroll tax, interest earned on its asset reserves, and the taxation of benefits. Though this net cash outflow will lessen modestly in 2019, it will reaccelerate in a big way in 2020 and beyond, according to the intermediate-cost model, as shown (all figures are estimated):
- 2018: $1.7 billion net cash outflow
- 2019: $0.2 billion net cash outflow
- 2020: $16.7 billion net cash outflow
- 2021: $32.9 billion net cash outflow
- 2022: $51.9 billion net cash outflow
- 2023: $73.8 billion net cash outflow
- 2024: $96.3 billion net cash outflow
- 2025: $122.4 billion net cash outflow
- 2026: $137.5 billion net cash outflow
- 2027: $169 billion net cash outflow
Adding this net cash outflow up works out to an outflow of $702.4 billion over the next decade. In the process, the Old-Age, Survivors, and Disability Insurance Trust’s asset reserves will drop from just north of $2.89 trillion to $2.19 trillion by the end of 2027.
Why’s this happening, you ask? It’s due to a combination of factorsOpens a New Window. that includes the ongoing retirement of baby boomers, the lengthening of life expectancies over many decades, and growing income inequality, to name a few.
Of course, based on the projections of the Trustees, $700 billion disappearing from Social Security’s coffers is peanuts compared to what’s expected to happen between 2028 and 2034. According to the intermediate-cost model, the remaining $2.19 trillion will disappear, leaving the program with no excess cash by 2034. – READ MORE
[give_form id=”79809″] [contentcards url=”https://www.foxbusiness.com/markets/700-billion-will-disappear-from-social-securitys-coffers-over-the-next-decade” target=”_blank”]