What Will Actually Happen to Your Social Security If the Trust Fund Runs Dry?

"The most recent Social Security Trustees' report estimates that the trust fund will be out of money in 2034 if the retirement trust fund and disability trust fund are combined (which is expected to be the most likely outcome). However, the Congressional Budget Office (CBO) has warned that the deadline day for the trust fund is likely going to be sooner, with the fund running short as early as 2032."

"While many people fear that the Social Security trust fund running out would result in benefits dropping to $0, that is simply not the case. The reality of what would happen is that the trust fund would not be available to provide reserve funds. However, Social Security is not funded solely by the trust fund."

"It is also funded by current workers who pay into the system, as well as by retirees who pay taxes on at least part of their Social Security benefits once their provisional income is higher than $25,000 for single tax filers or $32,000 for married joint filers (with provisional income equaling half of all Social Security checks, all taxable income, and some non-taxable income)."

"The revenue coming in from the collected taxes is substantial. So Social Security retirement benefits would not disappear, or even come close to doing so. Instead, all of the revenue collected from current workers could be dis"

The Social Security trust fund is projected to run out on the current trajectory, with estimates ranging from 2032 to 2034 depending on how trust funds are combined. Even if the trust fund is depleted, benefits would not drop to zero because Social Security is funded by both trust fund reserves and ongoing revenue from current workers’ payroll taxes. Additional revenue also comes from taxes on Social Security benefits for higher-income recipients, based on provisional income thresholds. With reserves unavailable, the program would rely on incoming revenue, which would likely require benefit reductions to match what the system can collect. The timing of depletion affects when these reductions could begin.

Read at 24/7 Wall St.