For most of its history, Social Security has been able to sustain itself financially. Unfortunately, that is changing and the federal government currently predicts that the trust fund will be completely depleted by 2036. Yet if the latest report by the Congressional Budget Office (CBO) is to be believed, that date may come sooner, potentially causing financial pain to those New York residents who rely on Social Security disability and similar programs.
Recently, the CBO released a report detailing a number of economic and budget forecasts. Among those forecasts was the outlook for the Social Security trust fund. It estimates that the trust fund will reach its peak in 2018 and start declining thereafter. By 2022, the trust fund could have only $2.7 trillion left. While that number sounds large, it is $1 trillion less than the estimate previously used to predict the trust fund's depletion by 2036.
For New Yorkers who rely on Social Security for all or part of their income, the consequences could be substantial. This is because current law says that once the trust fund is gone, the Social Security Administration could automatically cut payments by 22 percent. Right now, the average retired worker receives a $1,200 monthly benefit. A 22 percent cut would reduce that benefit significantly.
However, the news may be even worse for recipients of Social Security disability. According to a news report about the CBO projections, the Social Security Disability Insurance program could face a crisis in 2016. The program is geared toward working-age adults who are unable to work due to a disability, but the program may run out of funds within the next few years. New York residents who rely on the program should act sooner rather than later to ensure that they receive the full amount of their own benefits.
Source: Investor's Business Daily, "Social Security Trust Fund Outlook Takes $1 Tril Dive," Jed Graham, Feb. 2, 2012