Updated on February 23, 2024
Exploring the Future of Supplemental Security Income (SSI) in the US often sparks questions about the potential end of SSI benefits in 2024. Today, I’ll provide updates on the future outlook of Social Security, addressing the uncertainty around its existence beyond 2033. While there’s a projected financial shortfall in the trust fund supporting retirement benefits, it doesn’t necessarily mean Social Security will disappear. The program will still be funded by annual FICA taxes from companies and employees. However, without Congress intervention, these payroll taxes may cover only 77% of retirement payments, excluding contributions from the trust fund. Stay tuned for more details.
Will SSI Benefits End in 2024?
In the USA, millions of individuals aged 65 or older or with disabilities, having low incomes and limited assets, rely on SSI as a crucial support for their basic needs. SSI plays a pivotal role in assisting millions of Americans in the fight against poverty, ensuring they can address their living challenges. Research, including insights from SNAP, suggests that enhancing the asset limit could enhance the financial well-being of SSI beneficiaries and their families.
Since its establishment in 1935, Social Security has been a lifeline for hundreds of millions of Americans. The Social Security Administration ensures that retirees and those with severe impairments have sufficient financial support. Given the significant number of Americans dependent on SSI, concerns persist about the future of SSI benefits in 2024.
Social Security: A Brief History
Established in 1935, Social Security in the USA began as a contributory old-age insurance program, offering restricted and gradually increasing payouts for retirees. Over time, the program expanded its benefits to include self-employed individuals, agricultural and domestic workers, and survivors of recipients in 1939, 1950, and 1957, respectively, as well as disabled workers.
Anticipated financial challenges loom for Social Security, with projections suggesting that its reserves will be depleted by 2033, as payroll taxes alone are no longer sufficient to cover benefits. Without legislative action from Congress, a potential cut of more than 20% in benefits may be necessary at that time.
The Future of SSI in the United States
SSI benefits will continue beyond 2024, and with a 7.65% increase in cost, they will persist in offering government support. The future of Supplemental Security Income in the US will be influenced by inflation. Specific dates, such as December 29, 2023, January 1, February 1, March 1, April 1, and additional dates, are designated for SSI monthly payments in 2024.
Monthly SSI payments for 2024 are distributed on the first of each month. Typically, support for Social Security or SSI recipients is provided within one to three days of each month. The fate of Supplemental Security Income hinges on the timely distribution of SSI checks.
Challenges Facing SSI
Challenges for SSI: Aging Population, Decline in Workforce, and Longevity
The rising number of retirees, a shrinking working-age population, and longer life expectancies are key contributors to the challenges facing Supplemental Security Income (SSI). The projected increase in Americans aged 65 and older, from over 56 million to over 78 million by 2035, indicates a potential decrease in contributors to the Social Security system while the amount of benefits paid out increases.
Despite these challenges, it doesn’t imply a complete depletion of funds. Approximately 78% of scheduled benefits are expected to be covered by payroll taxes. However, without addressing the funding gap, potential solutions may involve increased worker contributions or reduced Social Security benefits for seniors.
Issues with Social Security
Challenges in Social Security: Aging Population and Declining Workforce
As Americans live longer and have fewer children, the country’s aging population is on the rise. The rapid retirement of the Baby Boomer generation, born between 1946 and 1964, is contributing to a reduced percentage of the population in the workforce.
U.S. Census forecasts indicate that in 2020, 17% of the population was 65 or older, and this is projected to increase to 24% by 2060. Meanwhile, the working-age population is expected to decline from 62% in 2020 to 57% in 2060.
This demographic shift means there will be fewer workers supporting each retiree in the future. By 2035, the number of workers paying Social Security taxes per recipient is expected to decrease. The 2023 report from the Social Security and Medicare Boards of Trustees suggests that the trust fund for retirement payouts will run out of money in 2033, a year earlier than previously anticipated in 2022. At that point, tax revenues are projected to cover only 77% of planned benefits, leading to concerns about the depletion of reserves in various Social Security funds, including the Old Age and Survivors Insurance Trust Fund.