Social Security is an important program for almost all households, whether they receive payment or pay into the system. But there are questions about the long-run viability of the program. NC State University economist Mike Walden considers its outlook.
“And, of course, the outlook for Social Security affects tens of millions of people, myself included, and it’s been a debate question in the presidential race, and it will continue to be. Right now, this year, Social Security is still on good footing. The Social Security system is taking in more money from payroll taxes than it’s paying out, but that’s projected to change in a few years — specifically 2022. That is the year right now that the analysts project that Social Security will begin to pay out more than it takes in.
“Now, it won’t create an immediate problem because Social Security has built up a multi-trillion-dollar surplus. But Social Security in 2022 will start to draw down on that surplus, and it’s projected it will draw it down to zero in the year 2035. So 2035 is really the crucial year because that’s at the point of time when Social Security won’t have enough to pay out promised benefits. It’s estimated that they will only be able to pay out 80 percent of what’s been promised. So that will be the year where our policy makers will have to make a decision — do they let that happen; do they make other changes to Social Security. That is the big multi-trillion-dollar question.”