A lot of people have no clue about the shape of social security’s budget, so here it goes:
2015 Cost: $888B (US total expenditures is $3.7T, so roughly 25% of US budget)
Size of Trust Fund: $2.8T
How much people contributed in 2015: $795B
Yearly income returns = 3.37% = $93B.
2015 Income (also includes interest on investments) – Outgo = $23 Billion
Okay, what can we see from this?
- The investment earnings are canceling out inflation, but not much more.
- The difference of the outgo and the income is greater than the investment earnings, so the trust fund is shrinking. I.e. it is becoming less viable, not more.
- The trust fund is only 3.2X yearly obligations, so without contributions from younger people to pay older people, the system would be broke in less than 4 years.
- Because the investment earnings only about equal inflation, for the system to be viable to pay an average of 15 years of benefits, the trust fund would need to be roughly 15X of obligations — more if population demographics increase the number of beneficiaries.
The general public isn’t paying attention. This is the last 1/3 of a person’s life, and we’re talking about Trump’s hair instead.