According to government projections, Social Security will be broke in 2033, but outside estimates suggest the date when the program can no longer pay its obligations is at least two years closer.
A pair of professors from Harvard and Dartmouth analyzed the demographic estimates which the Office of the Chief Actuary uses to determine how much money social security will pay out in coming years. They found that the methods currently in use are “antiquated, subjective and needlessly complicated.” The result is that the lifespans of Americans, and thus the amount they will claim in Social Security, is being badly underestimated.
How bad are the government estimates? The two academics claim the program will actually pay out $800 billion more in the next two decades than the government claims. This means the program will be broke and unable to meet its commitments in 2031, a full two years sooner than the current government estimate.
Not mentioned in the article is the fact that the 2031 number is based on the Social Security Trust Fund. In reality, Social Security is a pay-as-you-go system which has no money set aside. All of its payments come from the general Treasury. Since 2010, the government has spent more than it takes in through payroll taxes. Over the next ten years, the total amount the government will have to fund to keep current is $355 billion.
Fixing Social Security can be done in one of two ways. Either an increase of the payroll tax, about 2.7 percent additional from every individual, or by increasing the age of retirement to something closer to age 70. No doubt neither idea polls well but something has to give. Unfortunately, there are plenty of irresponsible actors–unions, progressive groups, Democratic Senators–on the stage assuring people they can have everything they want with no cost to them.
As of now, the program has at most 18 years of life, assuming we can come up with the trillion dollars in additional spending we need to keep it going between now and then.