Tax Tip of the Week | No. 264 | No Change to Social Security Depletion Date

Tax Tip of the Week | Aug 20, 2014 | No. 264 | No Change to Social Security Depletion DateHere's an article that we thought would interest you...

The Social Security Board of Trustees reports the combined asset reserves of the Old-Age and Survivors Insurance, and Disability Insurance (OASDI) Trust Funds are projected to become depleted in 2033.This is unchanged from the last two years, with 77% of benefits still payable at that time. The DI Trust Fund will become depleted in 2016, also unchanged from last year's estimate, with 81% of benefits still payable.The combined trust fund reserves are still growing and will continue to do so through 2019. Beginning with 2020, the cost of the program is projected to exceed income. The projected actuarial deficit over the 75-year long-range period is 2.88% of taxable payroll—0.16 percentage point larger than in last year's report."The projected depletion dates of the Social Security Trust Funds have not changed, and three-fourths of benefits would still be payable after depletion. But the fact remains that Congress can ensure the long-term solvency of this vital program by taking action," says Carolyn W. Colvin, Acting Commissioner of Social Security. "The Disability Insurance Trust Fund's projected depletion year remains 2016, and legislative action is needed as soon as possible to address this financial imbalance."Other highlights of the Trustees Report include:•    Income including interest to the combined OASDI Trust Funds amounted to $855 billion in 2013. ($726 billion in net contributions, $21 billion from taxation of benefits, $103 billion in interest, and $5 billion in reimbursements from the General Fund of the Treasury—almost exclusively resulting from the 2012 payroll tax legislation);•    Total expenditures from the combined OASDI Trust Funds amounted to $823 billion in 2013;•    Non-interest income fell below program costs in 2010 for the first time since 1983. Program costs are projected to exceed non-interest income throughout the remainder of the 75-year period;•    The asset reserves of the combined OASDI Trust Funds increased by $32 billion in 2013 to a total of $2.76 trillion;•    During 2013, an estimated 163 million people had earnings covered by Social Security and paid payroll taxes;•    Social Security paid benefits of $812 billion in calendar year 2013. There were about 58 million beneficiaries at the end of the calendar year;•    The cost of $6.2 billion to administer the program in 2013 was a very low 0.7% of total expenditures; and•    The combined Trust Fund asset reserves earned interest at an effective annual rate of 3.8% in 2013.

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