COVID-19 Could Drain Social Security's Trust Funds Much Sooner Than Expected

Social Security is in a tough spot financially right now. In the coming years, it expects to owe more money in benefits than it collects in revenue, due to the anticipated mass exodus of baby boomers from the workforce. While replacement workers will be coming to generate payroll tax revenue, which is Social Security's primary source of funding, that projected income won't suffice in bridging the aforementioned gap.

Thankfully, Social Security has trust funds it can tap to keep up with scheduled benefits when its expenses exceed its revenue. Those trust funds function as a savings account of sorts, but they're not unlimited, and back in April, the program's Trustees reported that they're likely to run out of money by 2035. At that point, Social Security may have no choice but to implement widespread benefits cuts in the absence of ample revenue.

But the COVID-19 crisis could make Social Security's financial situation even worse. And that's a possibility current and future beneficiaries need to gear up for.

Source Fool.com