The Social Security Crisis is now worse than previously thought. Each year, the Social Security Trustee’s Report updates us on the status of the Social Security Crisis. The most recent trustee’s report indicated that it would be 2016 before Social Security began paying out more in benefits than it collects in payroll taxes. However, the most recent White House budget figures show that in 2009, Social Security actually paid more in benefits than it collected in payroll taxes.
This worsening of the Social Security Crisis is due to the current economic downturn. With unemployment running around 10%, fewer people are working and paying into the Social Security System via payroll taxes. At the same time, thousands of seniors who had previously been working lost their jobs and were forced to start collecting Social Security benefits. This resulted in a double hit for the Social Security Crisis, because it meant fewer dollars coming into the system than expected, and more dollars going out than expected.
These same White House budget projections foretell even more gloom and doom for the Social Security Crisis. The projections show that in each of the next 10 years, Social Security will pay out more in benefits than it collects in payroll taxes. And unless something is done to address the Social Security Crisis, the situation will only get worse, because of the looming retirements by baby boomers.
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