Social Security's financial outlook

Abstract

The brief's key findings are: (1) The 2021 Trustees Report anticipates that the short-term effects of COVID will dissipate quickly, so the trust fund's depletion date moved only from 2035 to 2034. (2) For the long-run, the Trustees changed three ultimate assumptions -- a higher fertility rate, slower mortality gains, and a lower unemployment rate -- all of which improved the 75-year outlook. (3) Yet, the 75-year deficit grew from 3.21 percent to 3.54 percent of taxable payrolls due to various data updates and methodological changes -- most importantly, a new methodology for estimating fertility. (4) While the increase in the 75-year deficit is not a COVID story, the pandemic has underscored Social Security's vital role in providing steady income to beneficiaries and serving as a safety net for older workers. (5) To maintain public confidence in this valuable program and to avoid precipitous cuts in 2034, Congress should fix its finances.