The government warned on Tuesday that Social Security and Medicare will be insolvent sooner than previously expected. The trustees’ annual report revealed that Social Security will be paying out more money than it receives by 2016 (a year sooner than prior projections). Medicare is already doing the same.
Unless changes are made, the Social Security retirement fund will be depleted by 2037 and the Medicare trust fund will be insolvent in 2017. Additionally, Social Security recipients are not expected to get cost-of-living increases in 2010 or 2011. Cost-of-living increases have happened each year since 1975.
“We should neither be casual nor hysterical about the revised insolvency dates,” Social Security Commissioner Michael Astrue said. “The Social Security system will weather this recession. However, the sooner we get on with the task of reforming the system, the easier it will be to make the tough choices.”