New Bipartisan Bill Aims to Save Social Security -- but Will It?
Millions of Americans rely on Social Security to pay their living expenses during their senior years. But there's a big problem: In the coming years, Social Security is expected to owe more money in benefits than it collects in revenue as baby boomers exit the workforce and too few people replace them.
Social Security can tap its trust funds to make up for a revenue shortfall, but those cash reserves will only last so long. The Social Security Trustees' most recent estimates state that the program's trust funds could run out of money as soon as 2035, at which point only 79% of benefits will be payable. But that projection was made a year ago, without accounting for the financial impact of the coronavirus pandemic.
Social Security's primary revenue source is payroll taxes. But given that unemployment has been rampant over the past year, it's likely that the program took in a much lower level of payroll tax revenue in 2020 than its Trustees were counting on when they made their prediction a year ago. That means Social Security's trust funds could end up running out of money much sooner than 2035.
Source Fool.com
