Social security funds could run out sooner than expected due to the pandemic

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Social security funds that many Americans rely on for retirement benefits will run out sooner than expected due to the pandemic, according to a Treasury Department report released Tuesday.

Why it matters: Concerns about social security funding aren’t new, but the coronavirus pandemic appears to have taken another toll on Americans’ finances.

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The big picture: Most Americans rely on the two Social Security funds – the Old Age and Survivor Trust (OASI) and the Disability Trust Fund (DI) – administered by the Treasury Department for paychecks once they stop working after retirement or because of a disability . per CNBC.

  • “The finances of both programs have been severely impacted by the 2020 pandemic and recession,” the report’s fact sheet reads.

  • The AHV trust fund will be able to make regular payments until 2033, one year earlier than forecast in the previous year. After that, she can only pay 76% of the scheduled benefits.

  • The DI fund will be funded until 2057, eight years earlier than the previous year. At this point, she can only pay 91% of the scheduled benefits.

  • Medicare’s hospital insurance is expected to be depleted by 2026, the same estimate as last year, the report adds.

The bottom line: “Legislators have many policy options to reduce or eliminate long-term funding shortfalls in the social security and health insurance sectors,” the fact sheet reads.

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