Long-Term Projections for Social Security

In August, the Congressional Budget Office issued “CBO’s 2011 Long-term Projections for Social Security,” which covers the 75-year period spanning 2011 to 2085. Social Security is the federal government's largest single program. About 56 million people will receive Social Security benefits this year, the CBO estimates. About 69 percent are retired workers, their spouses, and children, and another 12 percent are survivors of deceased workers; all of those beneficiaries receive payments through Old-Age and Survivors Insurance (OASI). The other 19 percent are disabled workers or their spouses and children; they receive Disability Insurance (DI) benefits. CBO projects that in fiscal year 2011, Social Security's outlays will total $733 billion, one-fifth of the federal budget; OASI payments will account for about 82 percent of those outlays, and DI payments, about 18 percent.

CBO's first infographic, to support the report summarizes some of those most recent projections and provides background information on the program, including the number of beneficiaries and their distribution (among retired workers, disabled workers, and others), an explanation of how Social Security benefits are calculated, and a history of Social Security legislation since 1935. It points out that the immediate and permanent payroll tax rate that is required for Social Security to be solvent for the next 75 years is 1.6 percent and the combined across-the-board reduction in payable benefits in the year after the exhaustion of the combined Social Security trust funds in 2038 will be 19 percent if that doesn’t happen.

When you hear predictions that Social Security won’t be there when the younger generations retire, they are probably incorrect.