Published: Wed, June 06, 2018
Medical | By Marta Holmes

Medicare to Become Insolvent In 8 Years, Social Security in 16

Medicare to Become Insolvent In 8 Years, Social Security in 16

The combined reserves of the Social Security trust funds are expected to be depleted in 2034, the same time frame projected previous year, according to the latest annual report from the Social Security and Medicare Board of Trustees released Tuesday.

The Social Security program will pass an ugly milestone this year, as its costs exceed its income, according to its trustees.

The DI trust fund, on the other hand, is projected to be exhausted in 2032, extended from last year's estimate of 2028.

So far that does not appear to have happened, to judge from the annual report of the trustees of Social Security and Medicare, a group that includes three Trump cabinet officers.

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More than 60 million Americans benefit from both programs, which provide a guaranteed income and healthcare for many retirees and the disabled.

The Social Security program's costs are expected to exceed its income this year, marking the first time that has happened since 1982 and forcing the US government to dip into the retirement system's trust fund to pay benefits to participants. But when interest income is excluded from the equation, program costs exceed income throughout the 75-year projection period.

The government says Medicare's financial problems are getting worse and Social Security's can't be ignored.

The report from program trustees says Medicare will become insolvent in 2026, three years earlier than previously forecast. Good advisors have been factoring uncertainty around Social Security into their clients' plans for many years now.

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The trustees report is considered an annual wake-up call for the beleaguered programs, though consensus around ways to secure their future remains elusive. Trustees for the retirement and disability program revealed on Tuesday that Social Security will no longer be able to meet its obligations to beneficiaries starting in in 2034, or 16 years from now - which is less time than has elapsed since terrorists slammed airplanes into the World Trade Center and the Pentagon in 2001.

Medicare Part A's trust fund is funded through payroll taxes, split between employer and employee.

Democrats want to expand the safety net by spending more on health care and education. Options include raising the maximum income cutoff for imposing Social Security taxes, now $127,200.

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