Go-broke date pushed back

A stronger-than-expected economic recovery from the pandemic has pushed back the go-broke dates for Social Security and Medicare, but officials warn that the current economic turbulence is putting additional pressures on the bedrock retirement programs.

The annual Social Security and Medicare trustees report released Thursday says Social Security’s trust fund will be unable to pay full benefits beginning in 2035, instead of last year’s estimate of 2034. The year before that it estimated an exhaustion date of 2035.

The projected depletion date for Medicare’s trust fund for inpatient hospital care moved back two years to 2028 from last year’s forecast of 2026.

“Economic recovery from the 2020 recession has been stronger and faster than assumed in last year’s reports, with positive effects on the projected actuarial status of the trust funds in these reports,” the report states.

Forecasters said in the report that the ongoing COVID-19 pandemic will have no net effect on their long-range projections. But they also noted that assumptions for their latest report were made in February, which was before cases began climbing again nationally and inflation rose even higher.

Social Security pays benefits to more than 65 million Americans, mainly retirees as well as disabled people and survivors of deceased workers. Medicare covers roughly 64 million older and disabled people.

When the Social Security trust fund is depleted the government will be able to pay 80% of scheduled benefits, the report said. Medicare will be able to pay 90% of total scheduled benefits when the fund is depleted.

Income for Medicare’s hospital insurance fund is projected to be higher than estimates from last year because the number of covered workers who help fund it and their average wages are both expected to be higher.