SS_Medicare_flipbook_2017 - page 5

16.5
1950
2.1
2040
2.8
2016
The Bottom Line
Active workers per
Social Security recipient
Source: Social Security Administration, 2016
Challenges of an Aging Population
As the population ages, the ratio of workers (paying into Social Security) to retirees (receiving
benefits) continues to fall. In most years prior to 2010, Social Security had annual surpluses, but they
were not set aside to pay for future benefits. Rather, they were spent as part of the federal government’s
general revenues, and “IOUs” were issued to the Social Security Administration in the form of
financial accounts. These accounts are often referred to as the Social Security “trust funds.”
Since 2010, Social Security outlays have consistently exceeded tax revenues. The program’s six-
member Board of Trustees project that outlays will continue to exceed revenues on a regular basis.
This means that Social Security will continue tapping the interest on trust fund assets to cover benefits.
When you include the trust funds, Social Security should have sufficient resources to pay 100% of
scheduled retiree benefits until 2034. Once the trust fund reserves are exhausted, payroll tax revenues
would be sufficient to cover only about 79% of scheduled retiree benefits (this percentage will decline
to 74% by 2090, based on the current benefit formula).
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