The Social Security and Medicare trustees dropped their annual reports on June 9, and both programs face significant financing shortfalls that, left unaddressed, would force automatic benefit reductions affecting tens of millions of Americans within the next decade.
The numbers that matter
The Old-Age and Survivors Insurance (OASI) Trust Fund, the one that pays retirement benefits to the majority of Social Security recipients, is projected to exhaust its reserves in the fourth quarter of 2032. The combined OASDI funds, which include disability insurance, are expected to last until the third quarter of 2034.
The 75-year actuarial deficit for Social Security has increased to 4.42% of taxable payroll, up from 3.82% the previous year. That deficit translates to a $29.3 trillion present-value unfunded obligation.
Medicare isn’t faring much better. The Hospital Insurance Trust Fund, commonly known as Medicare Part A, is now projected to hit depletion in the second quarter of 2033. That’s one quarter earlier than last year’s estimate.
