Industry News

On September 14, 2021, the Center for Retirement Research at Boston College (CRR) released its issue brief, Social Security’s Financial Outlook: The 2021 Update in Perspective. As presented in the issue brief, CRR analyzed the 75-year deficit in Social Security benefits projected in the recently released 2021 Social Security Board of Trustees Report.

The brief’s key findings include:

• The 2021 Trustees Report anticipates that the short-term effects of COVID will dispel quickly, so the trust fund’s depletion date moved by only one year from 2035 to 2034.
• Over the long term, the Trustees changed three ultimate assumptions which improved the 75-year outlook: 1) a higher fertility rate; 2) slower mortality gains; and 3) a lower unemployment rate.
• However, the 75-year deficit increased from 3.21% to 3.54% of taxable payrolls due to various data updates and methodological changes (most importantly, a new methodology for estimating fertility).
• While the increase in the 75-year deficit is not due to COVID, the pandemic has highlighted the importance of Social Security to provide steady income to beneficiaries and serve as a safety net for older workers.

The brief concludes, “Social Security is facing a long-term financing shortfall that equals 1 percent of GDP. The changes required to fix the system are well within the bounds of fluctuations in spending on other pro­grams in the past. Moreover, action needs to be taken before the trust fund is depleted in 2034 to avoid a precipitous cut in benefits.”

The brief is available here.