This story has been updated to reflect Social Security income and expenses were in billions of dollars, not millions.
The latest trustee report from the Social Security Administration has been released.
The expense of running Social Security will exceed the revenue generated by the program next year, a new report released Monday showed, in a sign of the upcoming challenges to the key retirement program.
The Social Security Administration’s trustee report shows that, in 2018, income of $1.003 trillion only barely exceeded the costs of $1 trillion.
The program received $885 billion from the payroll tax, $83 billion in interest and $35 billion from taxing benefits, while it spent $988.6 billion on benefit payments, $6.7 billion on administrative expenses and $4.9 billion on railroad retirement expenses.
Costs haven’t exceeded expenses since 1982, but are projected to in 2020. Costs will then remain higher throughout the 75-year projection period, according to the forecast.The rising costs are a sign of the increase in the number of older Americans.
The actuarial picture actually improved slightly, with depletion of funds expected now in 2035, a year later than previously estimated, the Social Security Administration said. Disability applications have been declining since 2010. Economists attribute the decline in disability to an improving economy.
When the funds are depleted, Congress will have to pass a law in order to keep benefit payments at the same level. They could simply decide to pay benefits at the same rate and run up the deficit. Alternatively, Congress could raise the age that Americans get Social Security benefits or increase payroll taxes.
If Congress couldn’t agree to do anything at all, there would be sufficient income coming in to pay 80% of scheduled benefits, the Social Security Administration estimates.