In a Six-Year Blink of the Eye, Social Security Might Be Drained

In a Six-Year Blink of the Eye, Social Security Might Be Drained

According to a recent AP report, the Social Security disability fund is on a 6-year brink of destruction. Estimates project that the disability trust will run out of money by 2017, with the retirement fund drying up about two decades later.

The doomsday scenario is largely related to laid-off workers and aging baby boomers, who are currently draining disability monies. Compared to 10 years ago, disability applications are up nearly 50 percent.

In a bad economy, disability benefits increase as disabled workers lose their jobs and find themselves searching for work. And as people get older, disability rates also rise. Making things worse, the system encourages disability benefit applications at the expense of delaying benefits until retirement qualification. If a person qualifies for disability, he or she is entitled to full benefits, based on work history, even before 62. And disability beneficiaries automatically get Medicare after two years, even if they are younger than 65.

Currently, Congress is faced with two major issues: 1) delays for legitimate applications; and 2) overpayments to disability beneficiaries. Congress needs to deal with these issues and fast. Without Congressional action, Social Security as a whole (combined retirement and disability) will likely run out of money somewhere between 2036 and 2038.

. . . .

Explore the Estates, Gifts & Trusts and Elder Law resources

Discover the features and benefits of LexisNexis® Tax Center

For more information about LexisNexis products and solutions connect with us through our corporate site.