The Penn Wharton Budget Model (PWBM) projects that the Social Security Old-Age and Survivors Insurance (OASI) trust fund will be depleted in February 2033. This is slightly later than the official Social Security Board of Trustees’ projection, which forecasts the OASI fund depletion during the fourth quarter of 2032.
The nuances and timelines for both estimates highlight the ongoing financial pressures facing the retirement system:
- OASI Trust Fund (Retirement): PWBM estimates depletion in February 2033, compared to the Trustees’ projection of late 2032.
- Combined Trust Funds (Including Disability): PWBM forecasts a combined reserve exhaustion in February 2035, while the Trustees project the third quarter of 2034.
- The Depletion Reality: Depletion does not mean the system goes bankrupt. Incoming payroll taxes from workers and employers would continue to fund benefits, but without legislative intervention, the system would only be able to pay a portion of scheduled benefits (estimated at roughly 78-80%).
If you are interested, I can also break down:
- The primary causes driving the trust fund shortfall (e.g., demographic shifts and fertility rates)
- Potential congressional solutions like raising the retirement age or increasing payroll taxes
