Industry News

On May 7, 2019, the Center for Retirement Research at Boston College (CRR) issued its brief, Social Security’s Financial Outlook: The 2019 Update in Perspective. As presented in the issue brief, CRR analyzed the 75-year deficit in Social Security benefits projected in the recently released 2019 Social Security Board of Trustees Report.

• The 2019 Social Security Board of Trustees Report indicates a change in the 75-year deficit declining from 2.84% of taxable payrolls to 2.78%, or 1.0% of the Gross Domestic Product (GDP).
• The trust fund exhaustion date was extended from 2034 to 2035 when payroll taxes will cover about 75% of promised benefits.
• The improvement was primarily due to a more favorable financial outlook for the Disability Insurance program.
• Social Security’s financing shortfall is manageable, but needs to be addressed to equitably share the burden among cohorts, help restore confidence in the Social Security program, and allow sufficient time for individuals to adjust to changes.

The brief concludes, “Stabilizing the system’s finances should be a high priority to restore confidence in our ability to manage our fiscal policy and to assure working Americans that they will receive the income they need in retirement. The long-run deficit can be eliminated only by putting more money into the system or by cutting benefits.”

The report is available here.