The trust fund that supports Social Security disability benefits is expected to run out of money by 2017, according to new congressional estimates. If this occurs without Congress making adjustments, the program will be unable to pay full benefits to retirees in a few short years.
Baby Boomers Draining Social Security Trust Fund
According to the estimates released by Congress last week, Social Security’s smaller trust fund is in danger of running dry. Social Security Disability Insurance applications have increased nearly 50 percent compared to over a decade ago as people lose their jobs and are unable to find new ones. So far, about 7 million jobs are said to be lost forever.
This left many workers to simply exit the workforce permanently and instead collect as many benefits as possible, including unemployment, Social Security and even state or federal pensions if available.
Then there are the aging baby boomers who, according to estimates, are set to have an even greater impact on the government funds in the years to come. They are expected to significantly increase the number of retirees entering the system. With Social Security already in the red, there simply isn’t enough money to pay for them all.
Proposals Made to Save Social Security
With the Social Security trust fund struggling to keep up with the now 2-year backlog of applicants, and the much larger retirement fund projected to run dry by 2037, lawmakers are scrambling to come up with answers.
Ideas lawmakers have proposed range from increasing the retirement age to means-testing benefits for wealthy retirees. However, trustees who oversee Social Security are pushing Congress even further and asking them to shore up the system by reallocating money from the retirement program as lawmakers did in 1994.
Experts say that this would provide only short-term relief. With 3.3 million people expected to apply for federal disability benefits this year–700,000 more than in 2008–they say an even more aggressive measure will be necessary to ensure everyone gets their benefits.
Unfortunately, no one is certain about what that measure should be.