Industry News

On May 18, 2023, the United States Government Accountability Office (GAO) released the first report in a series, Social Security, Part 1: The Dilemma. The three-part report series focuses on Social Security and each report will cover one of the following topics: 1) Social Security’s financial challenges; 2) criteria for evaluating options for reforming Social Security; and 3) types of proposed Social Security reforms.

The first report in the series discusses the financial challenges of the Social Security program. It is based on GAO’s past work examining Social Security and the fiscal health of the U.S. as well as on data and projections from the 2023 Social Security Trustees Report.

As of January 2023, Social Security provides benefits to over 66 million retirees, individuals with disabilities, and others. For many retirees, their Social Security benefits comprise a significant portion of their monthly retirement income, especially those with relatively low career earnings.

Significant financial challenges threaten the long-term ability of the Social Security Administration (SSA) to continue to pay the full benefits for retirees and other beneficiaries. The GAO highlighted that the costs to pay SSA benefits from the Old-Age and Survivors Insurance (OASI) Trust Fund have exceeded the money received in taxes since 2010. At the current rate, the fund’s trustees estimate that the reserves will be exhausted in 2033 when it be unable to pay full scheduled benefits. The GAO urged that when timely actions are taken to address the financial challenges, the more gradually changes can be phased in so that workers would have more time to adjust and plan ahead for any changes needed for their retirement.

The report is available here.