Estimated Amount Of Life Insurance In Force As Survivor Benefits: Fill & Download for Free

Excellent question![And here's the tl;dr response: 2017, for disability benefits; 2033, for retirement benefits.]The good news is that pretty much every year from 1982, OAS/DI tax receipts, interest payments, and other income streams for the Social Security Trust Fund have exceeded benefit payments, operational Costs, and other expenditures by a fairly significant margin. In 2004 alone, for example, the surplus in revenue was nearly $140 billion in all. This has resulted in a Social Security "nest egg" of special series, non-marketable U.S. Government bonds, valued at approximately $2.2 trillion in 2007.However, as the Post–World War II "baby boom" generation continues to age and begin retiring in large numbers, these expenditures are projected to increase. At the same time, the total working-age population is simultaneously projected to decrease, as Baby Boomers transition away of the workforce and into retirement, increasing the Social Security Administration's reliance on a workforce primarily dominated by so-called Echo Boomers or "Millennials" and their descendants. At that point, the system will begin drawing on its reserves of United States Treasury securities, continuing to pay benefits at current levels until the Trust Fund is exhausted.The problem is compounded by the fact that unlike their parents' generation, Baby Boomers are expected to live longer, and in larger numbers, than any other generation in recent history. Indeed, according to the National Center for Health Statistics, Life expectancy at birth was 47.3 years in 1900, rose to 68.2 by 1950 and reached 77.3 years of age in 2002. And the Social Security Agency (SSA) trustees projects that life expectancy will increase just six years in the next seven decades, to 83 in 2075. (Data from the U.S Census Bureau, however, predicts an even more rapid growth, with an 83-year average life expectancy being achieved by around 2050). The issue of longevity is further compounded by the fact that aging Baby Boomers will also begin interacting with the healthcare system in record numbers (and at record cost), simultaneously drawing significant benefits claims out of the Medicare system as well.Unfortunately, Actuarial science, of the kind used to project the future solvency of Social Security, is (despite its name) in many respects as much "art" as it is "science." By very nature, it is subject to uncertainty and educated "best guess" estimates of future behavior and patterns, which are inherently difficult to predict and subject to unexpected change and adjustment. It is entirely possible that demographic changes, market and labor forces, or even (dare I say it?) government action might cause the actuarial and financial picture to change dramatically, drastically altering the projections and rendering much of the previous discussion moot.Thus, a more accurate question to ask might be:"How long will the Social Security system as it stands right now, survive in the U.S. unchanged?"And according to the Congressional Budget Office (as of December 2013) the answer to that question is the following:Under current law, the Disability Insurance (DI) trust fund will be exhausted in fiscal year 2017, while the Old-Age and Survivors Insurance (OASI) trust fund will be exhausted in 2033.The good news is, there are many ways to avoid this--assuming, of course, that the American people and their elected officials desire and endeavor to do so.Lift the payroll ceiling. Under current legislation, the "payroll ceiling" is now adjusted for inflation, and is currently capped at $113,700 for individuals. However, former United States Secretary of Labor Robert Reich suggests lifting the ceiling to increase the amount of American incomes subject to federal payroll taxes, such as Federal Insurance Contributions Act tax (FICA) or Self Employed Contributions Act Tax (SECA). And some economists (controversially) have even suggested abolishing the cap entirely, dramatically increasing the revenues available to fund the retirement of the Baby Boomer generation.Increase Social Security taxes. Current legislation puts the cumulative rate of federal payroll taxes at around 6.2%. However, if workers and employers each paid 7.6% (a 1.4% increase), it would eliminate the current financing gap altogether. This 1.4% increase (2.8% for self-employed) has over 60% support in surveys conducted by the National Academy of Social Insurance, making it one of the few (relatively) popular long-term solutions.Raise the minimum retirement age(s). Some economists have suggested (controversially) that raising the early retirement option from age 62 to 64 would help cut down on Social Security benefit payouts. Proponents argue that this would mitigate some of the effects of the sudden influx of Baby Boomers into the Social Security beneficiaries pool, allowing time for labor markets, private pension funds, and market forces to stabilize and compensate for the disruption. However, others argue that this would simply delay the problem until these individuals finally do retire, and does nothing to fix the underlying problem of outlays outpacing revenue.Means-test benefits payment. A relatively unpopular, but arguably effective solution, would be to phase out of Social Security benefits for those who already have income over a certain financial threshold--for example, $48,000/year ($4,000/month). This would eliminate over 20% of the funding gap, however once again critics point out that this only mitigates the effects of the larger socioeconomic problem, and does little to address the underlying democraphic picture, or provide a comprehensive, long-term solution.Change the cost-of-living adjustment, COLA. This equally unpopular solution would alter the manner in which the SSA calculates and awards adjustments to benefits payments as a result of rising Costs of living. Once again, critics point out that this only mitigates the problem, places a greater burden on retirees living on Fixed income, and ultimately does not address the underlying issues facing the Social Security program.Reduce benefits for new retirees. Another (somewhat unpopular) solution, would be to reduce the benefits payments for new retirees, establishing a two-tiered system of benefits payments. Older retirees--the ones who retired before the benefits payments were adjusted--would receive higher payments reflective of their advanced age and (presumably) greater need. But critics point out that younger retirees--those who entered into the system after whatever arbitrary date is used to alter the benefits plan--would be penalized for delaying retirement, and as a result would have a stronger incentive to retire sooner, so as to avoid having their benefits fixed at a lower rate. This would exacerbate the problem of large numbers of Baby Boomers leaving the workforce en masse, without addressing the underlying problem. Even so, proponents point out that if Social Security benefits were reduced by 3% to 5% for new retirees, about 18% to 30% percent of the funding gap would be eliminated.Tighten up Disability rules. A two-year investigation by the Senate Permanent Subcommittee on Investigations claimed to find widespread fraud in the Social Security Administration's Disability Program. Proponents of this method argue that Disability fraud, which has allegedly proliferated in recent years, has cost the program millions of dollars in unjustified, fraudulent disability payments, and that by punishing violators and rooting out fraud, millions of dollars of dollars could be saved, alleviating some of the burden on the system. However, critics point out that the disability program is only one small part of the overall Social Security Trust, and that even eliminating the program altogether would not resolve the underlying generational and demographic dilemma.Average in more working years. Under current law, Social Security benefits are now based on an average of a worker’s 35 highest paid salaries, with zeros averaged in if there are less than 35 years of covered wages. Proponents claim that the averaging period could be increased to 38 or 40 years, creating an incentive for workers to delay retirement, and remain in the workforce longer, and lowering payments for individuals who retire early. Although this could potentially reduce the Social Security deficit by 10 to 20%, respectively, critics once again point out that encouraging workers to delay retirement only "delays the inevitable." Furthermore, even by adjusting the working year average, the deficit will only be mitigated, not eliminated, necessitating other, more drastic measures to address the looming budgetary crisis.Require all newly hired people to join Social Security. Under current legislation, participation in the Social Security system is purely voluntary. But increased participation in the program (especially by young workers entering the workforce for the first time) would increase revenue generated for the Social Security trust fund, which would only partially be offset by benefits they might later collect as they retire. Nevertheless, in 2004, the Social Security Administration estimated that 96% of all U.S. workers were covered by the system. The remaining 4% mostly constituted a minority of government employees enrolled in public employee pensions and not subject to Social Security taxes due to historical exemptions. As a result, critics point out that there is little to be gained by making Social Security mandatory, as over 90% of all workers already pay FICA and SECA taxes.Hope this helps![Edit: Some of this information is rather dated. But rather than constantly edit this page with the latest facts and figures, I'm including a link to the Social Security page of the CBO's website. There you can not only read the most recent projections, but also peruse the "Policy Options" produced by the CBO for reducing the deficit.]