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


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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