'Peace of mind' for retirees: Social Security and Medicare won't run out of money as quickly as feared — but critics still say current policy is 'condemning' seniors to benefit cuts

But O’Malley also noted that a one-year reprieve won’t solve the problems plaguing Social Security, which is relied upon by about 71 million Americans, including retirees, disabled people and children.

He called on Congress to “take action,” stating: “Eliminating the shortfall will bring peace of mind to Social Security’s 70 million-plus beneficiaries, the 180 million workers and their families who contribute to Social Security, and the entire nation.”

Here’s when Social Security and Medicare are projected to go broke — and what lawmakers in Washington plan to do about it.

‘Significant financing issues’

The Trustees of the Social Security and Medicare trust funds kicked off their 2024 report summary with a simple fact: “both [Social Security and Medicare] continue to face significant financing issues.”

The Old-Age and Survivors Insurance (OASI) trust fund, which is used to pay retired workers, their spouses and children, and survivors, is expected to last until 2033 — after which the fund will only be able to meet 79% of its obligations.

Americans that receive or care for those receiving disability insurance (DI) can breathe a little easier. According to the report, the disability insurance trust fund is projected to be able to pay 100% of total scheduled benefits through at least 2098.

When the OASI and DI funds are combined, the resulting OASDI trust fund is expected to be able to meet 100% of its financial commitments until 2035 — which is one year later than the trustees reported last year, due primarily to higher projected labor productivity and a lower long-term-disability incidence rate.

After 2035, the OASDI’s continuing total fund income will only be enough to pay 83% of scheduled benefits.

By law, the two funds cannot actually be combined. The OASDI projection is used to indicate the overall status and solvency of Social Security.

Meanwhile, Medicare’s go-broke date for its hospital insurance (HI) trust fund was delayed by five years to 2036 in the latest report, which the trustees attributed, in part, to higher payroll-tax income and lower-than-projected expenses from last year.

Again, once the HI fund’s reserves are depleted, Medicare — the federal health insurance program that covers people age 65 and older and those with severe disabilities or illnesses — would only be able to cover 89% of its typical costs.

Politicians react

President Joe Biden reacted to the trustees’ report on X, claiming a win: “Medicare is stronger and Social Security remains strong. My economic plan has helped extend Medicare solvency by a decade. And I am committed to extending Social Security solvency by making the rich pay their fair share.”