Social Security benefits will be depleted by the year 2034, a recent report by officials shows.
The annual report, released Tuesday (August 31), predicts funds in the Social Security trust funds will be diminished a year sooner than reported last year because of the COVID-19 pandemic and subsequent economic fallout.
Social Security benefits paid by the administration will be reduced to 78% if Congress doesn’t act on correcting the long term funding shortage, the report says. Social security benefits are paid to people ages 62 or older, and people with disabilities who have work credits.
The report for future Medicare benefits remains on track with last year’s report, according to CNN, though it’s unclear how far-reaching the lasting impact of the pandemic will be on the nation’s economic recovery in the coming years.
Medicare Part A covers hospital and nursing home costs for senior citizens. The trustees report those funds will be gone by 2026 and will only be able to pay 91% of benefits.
Medicare Part B, which provides financial assistance for seniors’ doctor appointments and outpatient care, and Part D which provides prescription drug benefits are “adequately financed into the indefinite future,” the report said. This is due to laws requiring automatic financing for the benefit programs.
In the report, the trustees called on lawmakers to take action sooner to avoid benefit cuts to the more than 60 million Americans who rely on them. An estimated 65 million people were receiving Social Security benefits at the end of 2020 and about 63 million were getting coverage under Medicare.