The funds used to provide millions of Americans with Social Security and Medicare benefits are expected to run dry by 2035.
According to the Social Security Administration annual trustees report released Monday, Social Security is expected to face revenue shortfalls starting next year and be depleted by 2035, Fox Business reported.
The report said that the program, which services some 68 million people each year, will be spending more than it takes in beginning in 2020. According to a 2018 forecast, the program would be able to pay 100 percent of benefits until 2034. However, it will only be able to fund about 80 percent of benefits by 2035.
“Both Social Security and Medicare face long-term financing shortfalls under currently scheduled benefits and financing,” the report said.
When looked at separately, the Old-Age and Survivors Insurance trust fund will run out of reserves by 2034. However, Social Security disability funds, which come from Medicare, will not run out until 2052.
The average Social Security and/or Supplemental Security Income benefit was $1,347.06.
“Lawmakers have many policy options that would reduce or eliminate the long-term financing shortfalls in Social Security and Medicare,” according to a statement from the Social Security Administration.
“Lawmakers should address these financial challenges as soon as possible,” the administration added.
Consumer advocacy groups are working to get Congress to act on the matter.
Nancy Altman, president of advocacy group Social Security Works, said the “fire is already lit.”
“The House is acting, and they’re hoping to vote on legislation this year,” she said, according to CNBC.
While 2035 is a few years away, the report urges lawmakers to take action, as delays alter how long it may take to restore solvency to the program.
More than 200 lawmakers recently signed the Social Security 2100 Act in the House. Introduced by Democrat Rep. John Larson, the bill would gradually increase how much employees contribute to the plan through payroll contributions. CNBC reported that employees and employers would contribute 7.4 percent each by 2043, a raise from the current 6.2 percent that is now collected.
Other options for raising funds include increasing the retirement age or changing the procedure that calculates how people receive their benefits.
Social Security program running out of money, with benefits on track to be reduced by around 2035 unless Congress steps in, according to a report released by the Trump administration. https://t.co/GwscbbEfwG pic.twitter.com/Of6Pm01Aom
— ABC News (@ABC) April 22, 2019
For most Americans, Social Security refers to the OASI program — and it is the largest income-maintenance program in the U.S, according to the Social Security Administration.
Social Security is funded primarily through the Federal Insurance Contributions Act payroll tax or funds collected from the Self Employed Contributions Act Tax. In 2017, 24 percent of the budget paid for Social Security, while 26 percent paid for Medicare.