As we continue to wait for the 2021 annual report from the Trustees of the Social Security and Medicare trust funds to see what the coronavirus pandemic did to projections on when the trust funds will be depleted, there is an update from the nonpartisan Congressional Budget Office (CBO).
The new projections from CBO, provided in a July update to its 2021 Long-Term Projections for Social Security first released in March, state that the Social Security Trust Fund is slated to be exhausted in 2032—which is a full year later than CBO projected last year, but is 3 years earlier than the 2020 Social Security trustees report, released in April 2020 (and notably written before the economy went into recession because of the coronavirus pandemic).
That now dated 2020 Trustees report finds the combined asset reserves of the Old-Age and Survivors Insurance and Disability Insurance (OASI and DI) Trust Funds are projected to become depleted in 2035, the same as it projected in 2019, with 79% of benefits payable at that time. This is assuming there are no changes in taxes and benefits.
Source: CBO Extends Timeline for Social Security Trust Fund Depletion – 401K Specialist
I am surprised by the big difference between the two. I would tend to believe the trustee’s report more since, and I hope, it is done by actuaries who are very good at these things for life insurance companies.
Either way, I expect when the covid numbers catch up in the reporting, by 2023 or 2024, the the CBO projection might be closer to the truth. I say this because with all the forced unemployment, social security was not collecting those taxes and lost that income to place into the trust fund while still paying out.